Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

DERBYSHIRE COUNTY COUNCIL BILL [Lords]

Read the Third time and passed, with Amendments.

ESSO PETROLEUM COMPANY BILL

To be read a Second time upon Thursday next.

TYNE TUNNEL BILL (By Order)

Read the Third time and passed.

CITY OF LONDON (GUILD CHURCHES) BILL (By Order)

Adjourned Debate on Amendment proposed on Consideration, as amended [9th May], further adjourned till Monday, 30th May.

LANCASHIRE COUNTY COUNCIL (INDUSTRIAL DEVELOPMENT &C.) BILL (By Order)

Consideration, as amended, deferred till Monday next at Seven o'clock.

BRITISH TRANSPORT COMMISSION BILL (By Order)

Consideration, as amended, deferred till Monday next.

ESSEX COUNTY COUNCIL (FULLBRIDGE, MALDON) BILL [Lords] (By Order)

Second Reading deferred till Monday next at Seven o'clock.

Oral Answers to Questions — HOME DEPARTMENT

Murder and Manslaughter

Mr. Hobson: asked the Secretary of State for the Home Department how the figures for offences of murder of persons aged one year and over, attempt to murder, threats or conspiracy to murder, and manslaughter, other than those concerned with the use of motor cars, for the year 1959 compare with similar figures for the years 1955 to 1958, inclusive.

The Joint Under-Secretary of State for the Home Department (Mr. Dennis Vosper): I will, with permission, circulate a detailed table in the OFFICIAL REPORT.
The total figures for the four categories of offence—including motor manslaughter, which cannot be separated from other manslaughter—in the years 1955–59 were respectively, 460, 509, 518, 477 and 462. The 1959 total is provisional. The figures relate to the number of offences recorded by the police under the category in question at the end of the calendar year, without regard to changes resulting from court proceedings in the following year.

Mr. Hobson: While thanking my right hon. Friend for the promise of further statistical detail, may I ask him if he can say whether, in his view, these figures show if there has been any increase or not in the number of deaths due to criminal violence since the passing of the Homicide Act in 1957?

Mr. Vosper: The figures for the five years in question are, of course, all remarkably stable. As far as the offence of murder is concerned, involving victims aged one year and over, there was an increase in 1959, but the figure is still below that for 1956 and 1957. Therefore, the answer must be in the negative.

Following are the detailed figures:


NUMBER OF OFFENCES KNOWN TO THE POLICE OF (i) MURDER OF PERSONS AGED ONE YEAR AND OVER, (ii) ATTEMPT TO MURDER, THREAT OR CONSPIRACY TO MURDER AND MANSLAUGHTER OF VICTIMS OF ALL AGES.


—
1955
1956
1957
1958
1959 (provisional)


Murder (victims aged one year and over)
…
125
148
151
124
142


Attempt to murder (victims of all ages)
…
169
162
158
190
167


Threats or conspiracy to murder (victims of all ages)
…
44
57
62
55
61


Manslaughter* (victims of all ages)
…
122
142
147
108
92




*The statistics of offences known to the police do not distinguish between manslaughter by the use of a motor vehicle and other manslaughter. The numbers of prosecutions for manslaughter by the use of a motor vehicle in the years 1955 and 1959 were, however, as follows:


1955
…
…
…
…
29


1956
…
…
…
…
31


1957
…
…
…
…
4


1958
…
…
…
…
4


1959
…
…
…
…
Nil

Penal Establishments

Sir R. Glyn: asked the Secretary of State for the Home Department the total number of prisons, Borstals, approved schools, detention centres and other penal establishments in England and Wales; the average number of such penal establishments in each administrative county of England and Wales; and how many penal establishments are already existing in Dorset.

Mr. Vosper: The total number of prisons, Borstals, detention centres, approved schools and remand homes in England and Wales is 250. The average number in each administrative county is 4·3. The number already existing in Dorset is three.

Sir R. Glyn: Will my right hon. Friend bear in mind that the presence of these establishments causes a certain amount of inconvenience in the neighbourhood, owing to the activities of the people who escape from them, and is a burden on the local police forces? Would not my right hon. Friend agree that a small county like Dorset should not have any further penal establishments introduced into it?

Mr. Vosper: My hon. Friend may have in mind, of course, the open Borstal at Shaftesbury whioh has just been approved. I do not think that the number of these establishments in Dorset is excessive compared with neighbouring authorities, but. of course. I will bear my hon. Friend's point in mind.

Summer Time

Mr. Hunter: asked the Secretary of State for the Home Department whether he has yet received the replies from all the organisations he consulted on an extension of Summer Time; and if he will take measures to extend Summer Time until the end of October this year.

Mr. Vosper: Five of the 176 organisations consulted have not yet replied. As regards the second part of the Question, I would refer the hon. Member to the reply whioh I gave to my hon. Friend the Member for Newbury (Sir A Hurd) on 12th May.

Mr. Hunter: Is the Minister aware that his reply will be disappointing to millions of people? In addition to the pleasure that an extra hour of daylight would bring to them, it could be a big factor in reducing the terrible toll of road casualties. Surely that should make the Home Office make up its mind?

Mr. Vosper: The Home Office has come to no decision on this matter. All that I said was that we have had an extraordinarily mixed bag of replies in response to the questionnaire. They by no means conform to any one pattern, and therefore we must have a little more time for consideration.

Captain Pilkington: Is my right hon. Friend aware that a vast majority of people outside the organised bodies which he has consulted would very much like more hours of summer sunshine during the year?

Mr. Vosper: We have, of course, consulted all the organised bodies which represent the public—local authority associations, chambers of trade, and so on. The variety of replies that we have received is surprising, and they cextainly do not all point to the conclusion to which, in fact, my hon. and gallant Friend has himself come.

Mr. Fletcher: Will the right hon. Gentleman bear in mind that there is a great deal of popular feeling on this subject, a lot of which obviously does not manifest itself through any organised channel? I think that most hon. Members will agree that there is probably an overwhelming body of opinion which thinks that Summer Time could with advantage be extended. Will the right hon. Gentleman bear in mind the very valid observations of my hon. Friend the Member for Feltham (Mr. Hunter) about the effect this might have in reducing road accidents?

Mr. Vosper: Yes, certainly, I think there is much in what the hon. Member says, but I think that, in view of the conflicting reports, we must consult every Department concerned. I should not like the hon. Gentleman to think that we could necessarily make any change this autumn.

Royal Commission on the Police (Evidence)

Mr. Fletcher: asked the Secretary of State for the Home Department whether he will instruct governors of prisons to provide facilities to enable prisoners wishing to do so to give oral evidence to the Royal Commission on the Police with regard to their treatment in the police stations before being charged and before conviction.

The Secretary of State for the Home Department (Mr. R. A. Butler): Prisoners who wish to send written representations to the Royal Commission may do so; and I shall authorise the production before the Commission of any prisoner from whom the Commission wishes to hear oral evidence.

Mr. Fletcher: Will the right hon. Gentleman bear in mind that it is not altogether satisfactory for prisoners to tender written evidence, and that these prisoners are in an unique position to give evidence about what has happened

to them in police stations before their conviction and that they ought not to be prevented from doing so by reason of the fact that they have subsequently been convicted?

Mr. Butler: No, but I fail to see how I could have given a more generous and whole Answer than I have, because I have said not only that prisoners can give written representations, but that I shall authorise them to appear before the Commission when it wishes to hear their oral evidence. I hope that the hon. Member will feel satisfied that the latter assurance covers his supplementary question.

Civil Disobedience (Prison Sentences)

Mr. Pavitt: asked the Secretary of State for the Home Department the total estimated cost to Her Majesty's Government of the imprisonment of those persons who recently engaged in civil disobedience activities at Foulness.

Mr. Vosper: About £1,000.

Mr. Pavitt: Is not this an unnecessary burden on the taxpayers, caused by severe sentences which are disproportionate to the offence? Could not the Home Secretary intervene to ensure less rigorous action against those who feel so deeply about nuclear annihilation that they engage in non-violent disobedience?

Mr. Vosper: My right hon. Friend replied to a Question by the hon. Member for Gloucestershire, West (Mr. Loughlin) on the principle of this on 12th May, and I would not want to add to that reply—

Mr. Pavitt: Why not?

Mr. Vosper: —but the people concerned were first inflicted with a penalty which they chose not to accept, and the choice of imprisonment was the consequence of their refusal.

Justices of the Peace

Mr. Skeffington: asked the Secretary of State for the Home Department if he will consider introducing some payment for loss of time for justices of the peace serving outside London.

Mr. Vosper: The Justices of the Peace Act, 1949, in accordance with the recommendations of the Royal Commission, provides for the payment to justices of travelling expenses and allowances for overnight lodging. Last year, the Trades Union Congress represented that compensation should also be paid for loss of earnings. The Magistrates' Association and the Central Council of Magistrates' Courts Committees, whom my right hon. Friend has consulted, are opposed, by a majority, to this suggestion which my right hon. Friend is now considering further in consultation with my noble Friend, the Lord Chancellor.

Mr. Skeffington: Would the right hon. Gentleman consider taking evidence from bodies other than the two he has mentioned, because there is mounting evidence to show that a number of people can do this important work only at considerable personal sacrifice and that there is a large number of younger men and women who cannot hope to serve and help the community by doing this very important work? Will the right hon. Gentleman have another look at this matter?

Mr. Vosper: I should like to consider that suggestion. The hon. Gentleman will see that there is a conflict of opinion in the evidence contributed so far.

Miss Bacon: Does not the right hon. Gentleman agree that that is the view of the Magistrates' Association and those who are justices of the peace now, but that there must be many thousands of people in the country who are not justices of the peace who would like to be justices of the peace if only they could afford to be? Will he reconsider this matter to see that those many people, who would be extremely helpful, particularly in juvenile courts, are given a chance to serve in this way?

Mr. Vosper: That is just what we are doing. We are considering this matter. The point raised by the hon. Lady is certainly a very relevant one which my right hon. Friend and my noble Friend will take into account.

Dame Irene Ward: Can my right hon. Friend say whether he has had any representations from individuals who, on being invited to become magistrates,

have refused because they have been unable to meet the expenses?

Mr. Vosper: I am afraid I could not answer that question without notice.

Motoring Offences (Penalties)

Mr. C. Osborne: asked the Secretary of State for the Home Department (1) if he is aware that a motorist in England who fails to stop and report an accident can be fined only £20, and that, during 1958, the average fine imposed was 56s., whereas in New Zealand a similar case involving injury can be punished by a £500 fine or five years' imprisonment; if he will repeat the advice given by the then Lord Chancellor and circulated by his predecessor to magistrates after the passing of the Road Traffic Act, 1956, and urge magistrates to impose greater fines in such cases; if he will introduce legislation to increase the maximum penalties; and if he will make a statement;
(2) if he is aware that the average fine imposed in England in 1957 was £14 3s. 10d. for dangerous driving, whereas the maximum is £100 and, in 1958, it was under £14; if he will repeat the advice given by the then Lord Chancellor and circulated by his predecessor to magistrates after the passing of the Road Traffic Act, 1956, urging magistrates to impose the maximum fine more often; and if he will make a statement.

Mr. R. A. Butler: My noble Friend the Lord Chancellor suggested in the course of the debates on the Road Traffic Bill of 1956 that magistrates might be well advised to review the scale of the penalties which they customarily impose in motoring cases. He has since repeated this advice and I have no reason to think that magistrates are unaware of it or of the importance which Parliament attaches to this problem. I believe that courts have been reviewing their penalties and I understand that when figures for 1959 are available they will show some increase in average fines and in the use of disqualification.
My right hon. Friend the Minister of Transport has already made clear the Government's concern with the whole question of road safety, and I shall keep in close touch with him in the consideration which he is giving to it.

Mr. Osborne: In the first place, does my right hon. Friend agree that it would be much better to impose heavy fines than to send men to prison for short sentences? Secondly, does he agree that the fines which have been imposed are rather footling? In view of the fact that the value of money has fallen so much since the maximum fine was imposed years ago, will he urge the magistrates' courts to make use of the maximum penalties now in their hands?

Mr. Butler: Yes, the Lord Chancellor is seized of these matters. This is why I referred in my Answer to his initiative. With regard to the first part of my hon. Friend's supplementary question, I cannot interfere with the administration of justice, but on the whole I would rather people did not go to prison.

Court Cases, Yorkshire

Mr. A. Roberts: asked the Secretary of State for the Home Department in view of the delay in dealing with court cases in Yorkshire due to the large increase in the number of such cases, if he will consider introducing legislation to establish a Crown Court in Yorkshire.

Mr. Vosper: My right hon. Friend is aware that the increase in the number of cases committed to the superior courts for trial has caused difficulties in Yorkshire and elsewhere. The problem is under examination by the Interdepartmental Committee on the Business of the Criminal Courts and my right hon. Friend would prefer not to comment on the hon. Member's proposal until he has had the opportunity of considering the Committee's report.

Mr. Roberts: Will the right hon. Gentleman bear in mind that the Magistrates' Association, in submitting to the Streatfeild Committee its evidence, has established that there should be a Crown Court where there is a case-load of over 700 per year? Will he bear in mind that it would ease the very heavy pressure which now exists during brief periods in dealing with a large number of cases?

Mr. Vosper: Yes, it was the Streatfeild Committee to which I referred. I am quite certain that it will have regard to the hon. Member's point of view.

Mr. Hobson: Can my right hon. Friend indicate when the report of the Streatfeild Committee will be available?

Mr. Vosper: No. I should not like to comment on that, except that I believe it has more or less completed the taking of evidence. I certainly hope that the report will be available before the end of this year.

Homicide Act, 1957

Dr. D. Johnson: asked the Secretary of State for the Home Department on how many occasions since the passing of the Homicide Act, 1957, persons originally charged with murder have been found guilty, but had this charge reduced to one of manslaughter on the grounds of diminished responsibility by virtue of a plea made under Section 2 of this Act.

Mr. R. A. Butler: Since the Homicide Act was passed on 21st March, 1957, there have been 66 persons who were originally charged with murder but were found guilty of manslaughter by reason of diminished responsibility under Section 2 of the Act.

Dr. Johnson: In view of this really considerable number of people, will my right hon. Friend watch the operation of the Section carefully, as it seems that in some instances, such as the recent Birmingham murder, the more horrible the crime the lighter is the penalty inflicted through the operation of that Section?

Mr. Butler: Yes, provided by hon. Friend realises that the law is now being interpreted as passed by Parliament, and the only way of altering it would be fresh legislation. I will certainly watch the situation, but I would rather not give any undertaking about fresh legislation at the present time.

Penal Establishment, Grendon Underwood

Mr. K. Robinson: asked the Secretary of State for the Home Department to what extent plans for Grendon Underwood penal establishment have been modified since its original conception; when construction is expected to start; and if he will make a statement on the proposed function of this establishment.

Mr. R. A. Butler: The concept of a psychiatric prison originated a number of years ago and has been developed in the light of modern penal methods. Construction has already begun. The prison will provide psychiatric treatment for prisoners who, though not insane or mentally deficient, are recommended for this by prison medical officers following observation.

Mr. Robinson: Does that Answer mean that all the prisoners in this establishment will be drafted from other prisons? Is the Home Secretary aware that there is now some confusion, since the passing of the Mental Health Act, as to what is the appropriate form of treatment for a criminal psychopath as between a penal and a hospital setting?

Mr. Butler: Yes, Sir. There is this difficulty. People will not be drafted direct to this prison and will have to go there on the recommendation of the prison medical officer concerned. We must work on the difficult and delicate point which the hon. Gentleman has raised in the light of experience gained in the early days of this prison.

Immigrants (West Indies, India and Pakistan)

Lieut.-Colonel Cordeaux: asked the Secretary of State for the Home Department how many citizens of the West Indies entered the United Kingdom during 1959, during the first four months of 1959, and during the first four months of 1960, respectively.

Mr. N. Pannell: asked the Secretary of State for the Home Department the number of immigrants into the United Kingdom from the West Indies, India and Pakistan for the four months ended 30th April, 1960, as compared with the same period of 1959.

The Joint Under-Secretary of State for the Home Department (Mr. David Renton): I will, with permission circulate the figures in the OFFICIAL REPORT.

Lieut.-Colonel Cordeaux: Will my hon. and learned Friend agree with recent Press reports that the number of West Indian immigrants into this country this year is likely to be a record? If so, will he say whether he feels satisfied that in that case the opportunities

for them to get housing accommodation and employment will be adequate in cities such as Nottingham to which they can be expected to go?

Mr. Renton: My hon. and gallant Friend is quite right in saying that the figures for the first four months of this year are higher than in any previous year —indeed, very much higher. The second part of his supplementary question raises broad and separate issues which I could not very well answer at this moment.

Mr. N. Pannell: Will my hon. and learned Friend make further representations to the countries concerned to restrict emigrants from those countries to the United Kingdom, since it appears that the arrangements now made are proving quite ineffective?

Mr. Renton: That is a question for my right hon. Friend the Colonial Secretary.

Mr. Gordon Walker: Is it possible in these figures to distinguish between men and women and children, since it may be that the larger numbers now coming in consist much more of women and children of the men who have come before? If it is possible for him to give such figures, perhaps I could put down a Question, but I do not want to do that if it cannot be answered.

Mr. Renton: I should be grateful to the right hon. Gentleman if he put down a Question

Miss Lee: Will the hon. and learned Gentleman be careful to see that in any steps which he takes there is not even a shadow of racial discrimination?

Mr. Renton: Yes, indeed.

Mr. Dugdale: Can the hon. and learned Gentleman say how these figures of immigration from the West Indies compare with the figures for immigration from Ireland?

Mr. Renton: Not without notice.

Mr. F. Noel-Baker: Why is it thought unnecessary to apply any of the provisions of the Aliens Act to these people while it is thought necessary to apply them to Western Europeans? Is not that an anomalous situation? Is not it anomalous that large numbers of people from backward countries should be


admitted to the United Kingdom without any of those complicated procedures which are applied to Western Europeans?

Mr. Renton: The simple answer is that all these people from the West Indies are British subjects while the people from Western Europe come under the Aliens Act.

The following is the information requested:


ESTIMATED NET INWARD MOVEMENT


—
1959 (whole year)
1959 (first four months)
1960 (first four months)


West Indies
…
16,400
2,000
9,800


India
…
3,000
1,000
1,000


Pakistan
…
900
*—100
*—400


* Net outward balance.

Registered Clubs, London (Control)

Mr. Lipton: asked the Secretary of State for the Home Department whether, in view of the association between the crime wave and undesirable clubs in the London area, he will expedite legislation for the better control of such clubs.

Mr. Vosper: Consultations are proceeding with a view to introducing legislation to amend the law about registered clubs as soon as practicable.

Mr. Lipton: That is a very vague Answer which we have had before. Is not the hon. and learned Gentleman aware that the club problem is becoming an outrageous scandal? Would it not help to check these breeding grounds of crime and corruption if a short Measure were introduced quite quickly so that the police had the right to go before the local magistrates and oppose a club's application for a 5s. registration and were given the right of entry such as they have in respect of public houses? Has not the time come to take effective and immediate action?

Mr. Vosper: I do not think that that would be a complete solution to the problem which we have in mind. On Tuesday my right hon. Friend received a London County Council deputation upon this subject. The hon. Gentleman

must know that consultations are proceeding rapidly and we are anxious to reach an early solution.

Witnesses, Criminal Cases (Police Protection)

Mr. Healey: asked the Secretary of State for the Home Department if he will order an inquiry into the failure of the Metropolitan Police to protect witnesses in the Pen Club case from intimidation.

Mr. Grimond: asked the Secretary of State for the Home Department if he will introduce legislation to increase the powers of the courts and the police with regard to the protection of witnesses in criminal cases.

Mr. R. A. Butler: I am assured by the Commissioner of Police that in cases in which it is known that witnesses may be intimidated, protection is provided when it is possible and thought necessary to do so. In the case referred to by the hon. Member for Leeds, East (Mr. Healey), police protection was in fact provided for two witnesses. It was also offered to a number of other witnesses who declined it.
I am not at present satisfied that legislation giving special powers to the courts and the police is necessary, but I shall continue to watch the position carefully.

Mr. Healey: While I recognise the very serious physical and even legal difficulties under which the police are operating in this case, may I ask the Home Secretary whether he is aware that there is very widespread public concern and even alarm over the circumstances in which such cases have been heard? Can he assure the House that he will take some special measure to ensure that there does not remain a section of the population which seems to be entirely immune from the normal processes of British justice?

Mr. Butler: I am rather anxious not to go any further in relation to this case, since an appeal is pending, and I have chosen my words so as to avoid all possibility of prejudice. But that does not mean that I am not aware of the very serious nature of the statement made by the hon. Member and the importance of watching the situation. The courts have power to subpoena witnesses and, in some circumstances,


to attach for contempt persons who disobey those subpoenas. I am considering whether those powers are adequate and I am otherwise watching the situation.

Mr. Grimond: I am grateful for the Home Secretary's assurance that he is considering the matter further. Will he now look further into the question of the adequacy of the police force and whether we should not take further steps by raising their pay, and so on, so as to increase their numbers? Secondly, can he assure the House that the overriding consideration in these matters is not whether witnesses want protection, but whether it is desirable in the public interest that they should have it?

Mr. Butler: The great difficulty has been causing witnesses to come forward. I think that it would be very difficult to obtain powers from Parliament to bring into protective custody persons believed able to assist, and that is precisely our difficulty in dealing with this gang warfare and the present situation with which we are now dealing. That is why I have been watching it from the angle which I mentioned to the hon. Member for Leeds, East (Mr. Healey). I am looking forward eagerly to the Interim Report of the Royal Commission on the Police and I am well aware of the need for looking after the police and increasing their numbers.

Mr. Gordon Walker: Will the right hon. Gentleman in due course let us know how his thoughts are going in this matter? While we recognise the difficulties and do not want witnesses in this country to be arrested, as they can be in the United States, for instance, nevertheless, the course of justice may be in jeopardy because of witnesses being intimidated and even disappearing as a result of intimidation. Might not the answer be in there being greater power in the courts, and not the police, to cause witnesses to appear?

Mr. Butler: The interests of justice and the very serious situation which has arisen out of this case and which, alas, is prevalent in similar cases, must be carefully watched by Parliament and myself.

Publication (Police Inquiries)

Mr. Lipton: asked the Secretary of State for the Home Department whether

the Metropolitan Police authority has now decided to prosecute the printers and publishers of a periodical entitled the Ladies' Directory, which advertises facilities for prostitution.

Mr. Renton: The Commissioner informs me that the police have not yet completed their inquiries.

Mr. Lipton: Now that prostitutes have been advertising their services in this periodical for many months—and eight issues have appeared to date—will the Home Office send its copies to the Inland Revenue or to the Income Tax authorities so that they can ask for returns in respect of these flourishing business activities?

Mr. Renton: The Commissioners of Inland Revenue may well be interested in the hon. Member's useful suggestion. I am not sure how far it is proper for a Government Department to prompt the Inland Revenue in the way suggested, but I will bear the suggestion in mind.

Sir T. Moore: Can my hon. and learned Friend inform us how the hon. Member for Brixton (Mr. Lipton) gets hold of these interesting periodicals? Can he inform us whether it is from the Home Office, the Sunday Pictorial, or the News of the World? One would like to know.

Mr. Lipton: rose—

Mr. Speaker: I do not know whether the Under-Secretary wishes to answer the hon. Member for Ayr (Sir T. Moore).

Mr. Renton: I did. The hon. Member for Brixton (Mr. Lipton) did not get a copy from the Home Office. Indeed, I do not know whether he has one, but I can make discreet inquiries for my hon. Friend the Member for Ayr (Sir T. Moore) if he wants one.

Mr. Lipton: Would it help the hon. and learned Member and the hon. Member to know that this publication is openly on sale in the West End and that the hon. Member will have no difficulty in getting as many copies as he likes?

Motor Accidents (Prosecutions)

Dame Irene Ward: asked the Secretary of State for the Home Department whether, in the interests of road safety, he will prepare a comprehensive analysis


of the police prosecutions in respect of motor accidents taken before the courts of summary jurisdiction, on the lines of the local statistics published by the police authority in Newcastle-upon-Tyne.

Mr. Renton: I am not aware of any comprehensive analysis of prosecutions in respect of motor accidents in Newcastle-upon-Tyne. My hon. Friend may have in mind an analysis of the causes of road accidents contained in the annual report of the Chief Constable to the police authority. My right hon. Friends the Minister of Transport and the Secretary of State for Scotland publish each year a volume of statistics relating to road accidents which contains comparable information on a national basis.

Dame Irene Ward: While thanking my hon. and learned Friend for that reply, may I ask him if the Home Office is aware that the Minister of Transport has stated that the new analysis of accidents which he has undertaken is the first of its kind? Does not my hon. and learned Friend think that it is most extraordinary that we should have been talking about road accidents for years and years without any proper analysis whatever having been made of what prosecutions there were, and what followed from those prosecutions? Does he not also think that the whole basis of this examination has been deplorably neglected?

Mr. Renton: I would not accept the extreme statement which my hon. Friend has just made. These analyses are necessarily very elaborate and involve a great deal of research. The research upon which my right hon. Friend the Minister of Transport is engaged is, I understand, of a limited character, and even so it will take some time. Nevertheless, we are anxious to have as much evidence as possible about the causes of accidents.

Aliens (Registration and Notification)

Mr. F. Noel-Baker: asked the Secretary of State for the Home Department when he will complete his study of the present system of registration and notification laid down in the Aliens Order, 1953; what changes he proposes to introduce; and the reason for the long delay.

Mr. Renton: This is a complex and difficult matter involving many consultations. My right hon. Friend will make a statement as soon as possible.

Mr. Noel-Baker: Can the hon. and learned Gentleman give any indication when the statement is likely to be made? Although no one wants to diminish the rights of British citizens to enter British and Commonwealth Territories freely, is it not anomalous that we draw a distinction between people from Malaya, the West Indies and Africa, and people from Western Europe and elsewhere? Is it really necessary to subject the latter to a complicated rigmarole which compares very unfavourably with immigration regulations in force in nearly every other country in Europe?

Mr. Renton: The hon. Member is trying to fire his second barrel at the same target, but the target has not been erected on this occasion. His supplementary question is quite irrelevant to the Question on the Order Paper.

Mr. Noel-Baker: In order to clarify the mind of the hon. and learned Gentleman, I beg leave to raise this matter on the Adjournment at the earliest possible opportunity.

Mr. W. J. Darby (Fingerprints and Photographs)

Mr. Wigg: asked the Secretary of State for the Home Department in whose custody the fingerprints and photographs of Mr. W. J. Darby, 17, Cleo Road, Dudley, which were obtained without statutory authority, are held under the provisions of Section 6 (2) of the Prevention of Crime Act, 1871.

Mr. Renton: Criminal records held at New Scotland Yard under Section 6 of the Prevention of Crime Act, 1871, are in the custody of the Commissioner of Police of the Metropolis. Statutory authority is not necessary for the taking of fingerprints and photographs with consent.

Mr. Wigg: Is the hon. and learned Gentleman aware that I am not asking whether these fingerprints are in custody but where they are and who has them, for they are certainly within the custody of an officer appointed by the Home Secretary? Surely we can be told who has these documents?

Mr. Renton: My right hon. Friend's responsibility is limited to ensuring that the central registrar kept by the Commissioner is in the prescribed form. He has no responsibility with regard to the records sent to it or the destruction of records kept at it.

Mr. Wigg: That is not the point. This is a humble citizen who now seeks redress in the courts. May I take it that the Home Secretary will accept service of a writ? If so, I will see that he is obliged.

Mr. Renton: Most certainly not. I do not think that any writ served on the Home Secretary in the way that the hon. Member suggests would be of any legal effect.

Mr. Gordon Walker: Although it is possible to take fingerprints without statutory authority if consent is given, is there any statutory power to keep them if that consent is subsequently withdrawn?

Mr. Renton: I understand that there is statutory power for those who have custody of these fingerprints to keep them once they have been given consent.

Mr. Shinwell: Will the hon. and learned Gentleman reply to the simple question: who has custody of these fingerprints?

Mr. Renton: I can only answer questions on matters for which my right hon. Friend is responsible. He has no responsibility for the custody of any particular evidence.

Probation Service

Mr. Lindsay: asked the Secretary of State for the Home Department when he is expecting the report of the Departmental Committee on the probation service.

Mr. Vosper: I am not yet able to say when the Committee will report.

Organised Crime, London

Miss Bacon: asked the Secretary of State for the Home Department what special steps he proposes to take to deal with the gang warfare and protection rackets which exist in London.

Mr. R. A. Butler: I am in close touch with the Commissioner of Police and am

satisfied that the Metropolitan Police are doing everything possible to suppress organised crime in the Metropolis.

Miss Bacon: Is the right hon. Gentleman aware that there is a great deal of public concern about recent incidents? Has his attention been drawn to the incident this week in the Edmonton district in which a gang entered a street and terrified its inhabitants? It is not now what might be called the underworld which is being affected by this gang warfare but ordinary people in London.

Sir T. Moore: What about corporal punishment?

Mr. Butler: I am aware of that incident. I am also satisfied that the police, by setting up a new criminal intelligence section, and in other ways, have had considerable success against these dangerous gangs. I can assure the hon. Lady that not only by the improvements in the conditions of the police that we hope to effect but also by increasing their numbers, and in other ways, we hope to combat this very serious wave of crime.

Cremation Certificates (Doctors' Fees)

Mr. G. Thomas: asked the Secretary of State for the Home Department whether he is aware that doctors in some National Health Service hospitals are charging £4 4s. for the signing of a cremation certificate, despite the recommendation of the British Medical Association that £2 2s. is an adequate fee for this purpose; and whether he will now exercise his statutory powers to regulate the fees that doctors may charge in these cases.

Mr. Vosper: The Home Office is reviewing the Cremation Regulations, including the question of prescribing fees for cremation certificates.

Mr. Thomas: While thanking the right hon. Gentleman for that reply, may I ask if he is aware that there is a great deal of social injustice involved when hospitals within the same city charge different fees for the production of these certificates? The sooner action is taken the better.

Mr. Vosper: At present there is a voluntary arrangement in effect through the co-operation of the British Medical Association, and generally it has worked


well. The question now arises whether some compulsory condition should be imposed. I should be grateful to the hon. Member if he would send me particulars of individual cases where a fee of more than two guineas is charged, and I will look into them.

School-Crossing Patrols, Metropolitan Area (Pay)

Mr. Weitzman: asked the Secretary of State for the Home Department why school-crossing patrols in the Metropolitan Police area had a day's pay stopped on the occasion of the royal wedding.

Mr. Renton: Under their conditions of services, patrols are not paid for days when the schools are closed. But the day of the Royal Wedding was an exceptional occasion, and arrangements are being made to pay patrols in the Metropolitan Polict District for that day.

Magistrates' Courts Act, 1952

Lieut.-Colonel Cordeaux: asked the Secretary of State for the Home Department whether he will amend the Magistrates' Courts Act of 1952, to ensure that whenever the justices decide not to sit in open court they shall not make public the names of the accused persons without making public their addresses also.

Mr. R. A. Butler: The whole question of the reporting of proceedings before examining justices was recently considered by the Departmental Committee of which Lord Tucker was Chairman. I have noted my hon. and gallant Friend's proposal for consideration with the recommendations of the Committee, but the matter is a difficult and controversial one and I cannot at present give any further undertaking.

Lieut.-Colonel Cordeaux: Is my right hon. Friend aware that when the Work-sop Magistrates' Court adopted this procedure on Tuesday of last week and disclosed only the names and nothing else of ten men jointly accused of an unspecified offence, one of the names was Mr. John Storey, that there was another John Storey, who was a candidate in the Nottingham City Council election two days later, and that, although I am glad to say he is now Councillor John Storey, he suffered great

embarrassment during his campaign? As a result of that case alone, would my right hon. Friend give urgent consideration to the Tucker Report with a view to amending the Act.

Mr. Butler: I will undertake to give this further active consideration. This case was brought to my attention.

Professional Bodies (Disciplinary Tribunals)

Mr. F. Pearson: asked the Secretary of State for the Home Department if he has received the Report of the Departmental Committee on the issue of subpoenas for the purposes of disciplinary tribunals of professional bodies.

Mr. R. A. Butler: Yes, Sir. The Report has been laid before Parliament and will be available in the Vote Office at four-o'clock this afternoon. My right hon. Friend the Secretary of State for Scotland and I should like to take the opportunity to express our indebtedness to Lord Simonds, the Chairman, and to Lord Morris and Lord Thomson for their valuable services.

British Actors' Equity Association (Representations)

Dr. A. Thompson: asked the Secretary of State for the Home Department (1) what reply he made to the representations made to him by the deputation which he recently received from British Actors' Equity Association on the regulation of backstage accommodation and conditions;
(2) what reply he made to the representations made to him by the deputation which he recently received from British Actors' Equity Association on the regulation of fee-charging employment agencies for actors.

Mr. Vosper: When I received the deputation on my right hon. Friend's behalf, I promised to consider carefully what the deputation had said and to convey its views to my right hon. Friend.

Dr. Thompson: Arising from Question No. 29, will the right hon. Gentleman bear in mind that although it is eleven years since the Gower Committee on Health, Welfare and Safety in Non-Industrial Employment reported on the


deplorable conditions in which the entertainment industry works, if anything conditions have got worse since then, particularly, according to Equity, in commercial television and B.B.C. rehearsal rooms, where sanitary conditions are deplorable, both sexes change in the same dressing room and toilet accommodation is non-existent? In connection with Question No. 30, is the Joint Undersecretary aware that the main reason for these representations is that managers who employ actors frequently have a financial interest in the agency which acts as the intermediary and that when an actor pays 10 per cent. to the agency he is paying it back to the employer for the privilege of working for him?

Mr. Vosper: I told the deputation, which I saw partly at the invitation of the hon. Member, that the Government would consider the subject of the hon. Member's first Question in the light of any consequential legislation following upon the passage through the House of the Offices Bill introduced by the hon. Member for Greenwich (Mr. Marsh). The subject of the hon. Member's second Question is a technical matter of some complexity on which there are different opinions, but I promise to consider it further.

Oral Answers to Questions — RHODESIA AND NYASALAND Dr. Hastings Banda

Mr. Pavitt: asked the Minister of State for Commonwealth Relations why a letter written on 12th February by Dr. Hastings Banda in Gwelo Prison, passed by the prison authorities on 13th February and sent by air mail shortly afterwards, did not reach the hon. Member for Willesden, West, until 11th April, 1960.

The Under-Secretary of State for Commonwealth Relations (Mr. Richard Thompson): The dispatch of correspondence of persons detained in the Federation is a matter for the Federal Government; so are the postal services in the Federation. The inquiries which have been made have not so far disclosed the reason for the delay described by the hon. Member. If he will send me the envelope I will make further inquiries.

Mr. Pavitt: Cannot the Minister use his influence to make sure that we do not

have this kind of action again on the part of the Federal Government? Is it not intolerable that Dr. Banda's thanks to the people of Willesden for shoals of Christmas cards should be delayed for three months? Does it harm the Federal Government that Dr. Banda should write:
I spent the happiest days of my life both as a doctor and as a man in Willesden
and:
I made me very happy to receive so many cards from the people of the borough"—

Mr. Speaker: Order, Extensive quotation in a supplementary question is out of order.

Oral Answers to Questions — COMMONWEALTH RELATIONS

Commonwealth Day

Mr. Swingler: asked the Minister of State for Commonwealth Relations what consultations he has had with representatives of the Commonwealth concerning suitable joint celebrations on Commonwealth Day to mark the significance of the Commonwealth as a multiracial society founded on racial equality.

Mr. R. Thompson: None, Sir, for the reasons given by my right hon. Friend the Chancellor of the Exchequer in reply to a Question by the hon. Member for Islington, East (Mr. Fletcher) on 3rd May.
The significance of the Commonwealth as a multiracial association was emphasised in the communiqué issued by the Commonwealth Prime Ministers at the end of ther meeting last week.

Mr. Swingler: Would the Undersecretary of State reconsider this suggestion? Does not next Tuesday provide a first-class opportunity for making clear throughout the Commonwealth and the world that the Commonwealth, as an association of independent nations, depends upon the recognition of racial equality and the rejection of policies based on racial discrimination?

Mr. Thompson: Yes, Sir, but one of the problems here is that Commonwealth Day is not observed officially in any member country of the Commonwealth other than the United Kingdom, and I think that the emphasis given at the end


of the communiqué to this very point, to which the hon. Member referred, is a sufficient statement of the importance attached to it.

Oral Answers to Questions — UNION OF SOUTH AFRICA

Sharpeville (Fund)

Mr. Dugdale: asked the Minister of State for Commonwealth Relations whether, in view of the fact that the Mayor of Vereeniging has now opened a fund in aid of the dependants of those killed at Sharpeville, including British protected persons, he will make a contribution to this fund.

Mr. R. Thompson: The High Commissioner has been asked to ascertain and report whether any of the dependants of Basuto who were killed are citizens of the United Kingdom and Colonies and are suffering hardship and, if they are, to consider whether they could appropriately be helped through the Basutoland Government.

Mr. Dugdale: Is the Under-Secretary of State aware that the Mayor of Vereeniging showed great courage in opening this fund and that he hoped that it would aid British protected persons if any were found to have been injured? Will the Government show equal courage by supporting the Mayor with a contribution to this fund?

Mr. Thompson: The point is that if we can help any of our own people's dependants who have been put in distress we should try to do it on the basis that we help them and not give help in an indiscriminate way.

Mr. Dugdale: Is the hon. Gentleman aware that Her Majesty's Government have helped funds in various countries in which British protected persons were not involved and will he not help this fund in the same way?

Mr. Thompson: I think that the proposal I have made is preferable in this case, because it would direct any assistance that is forthcoming to the proper kind of recipient.

United Kingdom Citizens and British Protected Persons

Mr. Dugdale: asked the Minister of State for Commonwealth Relations

whether he has completed his inquiries into the arrest of United Kingdom citizens and British protected persons in South Africa; and whether he is satisfied with the arrangements which exist for obtaining information from the South African Government.

The Secretary of State for Commonwealth Relations (Mr. C. J. M. Alport): As I informed the House on 5th April, the South African Prime Minister has assured the United Kingdom High Commissioner that as soon as any person arrested as a result of the emergency has been identified, to the satisfaction of the Union Government, as being not a South African citizen but a citizen of the United Kingdom and Colonies, or a British protected person, the High Commissioner, or his representative, may have access to him.
This arrangement appears to be operating satisfactorily, allowing for the time taken in establishing the citizenship status of persons affected.
Inquiries are still proceeding to establish the citizenship of an African under detention named Mpho who claims to belong to the Bechuanaland Protectorate.

Mr. K. Robinson: asked the Minister of State for Commonwealth Relations if he will request the United Kingdom High Commissioner to seek the permission of the Government of the Union of South Africa for the inspection by the International Red Cross of prisons and detention camps in which British subjects and British protected persons are detained.

Mr. R. Thompson: No, Sir. As my hon. Friend informed the House on 5th May in reply to the hon. Member for Islington, East (Mr. Fletcher) so far as is known, only two citizens of the United Kingdom and Colonies are at present detained in the Union of South Africa under the Emergency Regulations, and the High Commissioner has reported that neither has any complaints about conditions of detention.

Mr. Robinson: Is the hon. Gentleman aware that information has been reaching this country that conditions in many of the South African gaols are disgustingly primitive? Is he further aware that there was a very serious


typhoid epidemic in the Fort Prison in Johannesburg a year ago when it was substantially less overcrowded than it is today? In view of the fact that the International Red Cross inspected detention camps in Kenya, will he not do what the Question asks?

Mr. Thompson: It is perfectly true that the international committee has, with the agreement of the Colonial Office, and also with the agreement of the British Red Cross, inspected detention camps in Cyprus and Kenya, but it has no right to investigate conditions in any country, and can do so only with the agreement of the Government concerned.

Oral Answers to Questions — SOUTHERN RHODESIA

Constitution

Mr. Stonehouse: asked the Minister of State for Commonwealth Relations what reply was given by Her Majesty's Government to the request from the National Democratic Party for a constitutional conference on the future of Southern Rhodesia to be held before any amendment of the Constitution or withdrawal of the reserve powers of the United Kingdom.

Mr. Alport: When my noble Friend the Secretary of State received a deputation from the National Democratic Party on 28th April, he told it that he did not know if any amendment of the Southern Rhodesia Constitution would be made; or if the circumstances in which that might be considered would be such as to make it desirable to call a conference; or, if a conference were called, what its composition might be. The attention of the National Democratic Party has since been drawn to my statement in this House on 9th May.

Mr. Stonehouse: Is the Minister aware that the deputation of the National Democratic Party is much appreciative of the courtesy with which it was received by the Secretary of State? But, in view of the direct relationhip which exists between the United Kingdom and the Africans of Southern Rhodesia who enjoy the protection of the United Kingdom, would it not be far more satisfactory in the consideration of any amendment of the Constitution for all parties

to be consulted rather than that direct negotiations should take place between the United Kingdom and the Prime Minister of Southern Rhodesia, who represents only a minority of that country's population?

Mr. Alport: I do not think that the hon. Member would argue Chat it is not right that discussions on this important question should take place first between the Government of the United Kingdom and the Government of Southern Rhodesia. What might be the composition of a conference on the constitutional future of Southern Rhodesia is a matter which I have previously explained would be for decision at a later stage.

Mr. Marquand: Will the right hon. Gentleman bear in mind that there is to be a constitutional conference in Nyasaland and it is surely entirely reasonable that Her Majesty's Government should draw the attention of the Southern Rhodesia Government to the desirability of a conference in Southern Rhodesia at the present time?

Mr. Alport: This is a matter on which I have answered a number of Questions on a previous occasion. I explained to the House on that occasion that, as a result of the last discussions which had taken place between the Secretary of State and the Prime Minister of Southern Rhodesia, various ideas were under discussion and thought at the moment, and that until those had been properly analysed and studied it would not be possible to make a decision on the matter.

Mr. Marquand: The right hon. Gentleman says that matters are under discussion. Will he not indicate that it is desirable that after those discussions have been completed a constitutional conference should be held?

Mr. Alport: Until we are quite certain what matters will come before a constitutional conference it would be premature to make an announcement on that subject.

Mr. Stonehouse: asked the Minister of State fox Commonwealth Relations how Her Majesty's Government propose to assess the interests and opinions of Africans in Southern Rhodesia in consideration of changes proposed in the Constitution of the Colony.

Mr. Alport: I would refer the hon. Member to the Answer given by my hon. Friend the Under-Seeretary of State to the hon. Member for Cardiff, South-East (Mr. Callaghan) on 3rd May, and also to my statement of 9th May.

Mr. Stonehouse: Is the Minister aware that the overwhelming mass of Africans in Southern Rhodesia are opposed to any amendment of the Constitution which would remove the protective clauses? Will he bear in mind that the chiefs in Southern Rhodesia are civil servants, and as such are subject to the directions of the Prime Minister of that country and therefore are in no way representative of public opinion?

Mr. Alport: I am not aware on what evidence the hon. Gentleman bases his statement, but, as my right hon. Friend the Prime Minister said, in the event of any change being made in the Constitution of Southern Rhodesia the interests of Africans would be given full weight, and that undertaking remains.

Mr. Stonehouse: How?

Sir G. Nicholson: My hon. Friend is aware how thorny this subject is. Will he at any rate undertake to sound opinion in this House, either publicly or unofficially, before any final decision is taken?

Mr. Alport: As I think has been the practice for many years, the opinion of this House with regard to any great move that may have to take place is invariably ascertained at the appropriate time.

Mr. Marquand: Cannot the Minister be a little more forthcoming? Is he aware that public opinion in this country is generally anxious about this matter, as there are no African representations at all in the Legislature of Southern Rhodesia, and no constitutional change should be made there without rinding some means of ascertaining the opinions of Africans?

Mr. Alport: As my right hon. Friend the Prime Minister has said, the views of the Africans will be given full weight, and therefore it will be necessary to make sure of their views at that time.

Mr. Gaitskell: How exactly will the opinions of the Africans be obtained?

Mr. Alport: That is a matter which will have to be considered at the appropriate time.

Mr. Gaitskell: Are we to understand that the Minister and the Secretary of State have given no consideration to this problem of how to ascertain the opinions of Africans? If they have given consideration to it, cannot we be told what their plans are?

Mr. Alport: I explained to the right hon. Gentleman on a previous occasion that we were still in the preliminary stages of the discussions and consideration of the subject. When the due time comes for these matters to be raised in concrete form, naturally I shall have great pleasure in telling the right hon. Gentleman and the House what they are.

Oral Answers to Questions — SWAZILAND

Immigration

Mr. Brockway: asked the Minister of State for Commonwealth Relations if he authorised the Proclamation for Swaziland which empowers the Government to expel any immigrant without the right to appeal to the courts and which gives absolute discretion to the High Commissioner to grant or to refuse residence permits and to attach any conditions when they are granted.

Mr. Alport: Normal immigration into Swaziland is governed by the Swaziland Immigration Proclamation, 1956, and the African Immigration Proclamation, 1959. The High Commissioner, with my noble Friend's approval, has recently taken powers to grant, in his absolute discretion, special permits for entry and residence if satisfied that the circumstances of any particular case so require. These special permits may be cancelled by the High Commissioner at any time without assigning any reason, and it is provided that the grant, refusal or cancellation of such special permits cannot be made the subject of legal proceedings. These special provisions are for use in exceptional cases only; the provisions of the 1956 and 1959 Proclamations regarding normal applications for entry and residence remain in full force. These provide a right of appeal to the courts in certain circumstances when persons are deemed to be prohibited immigrants.

Mr. Brockway: While recognising the non-discriminatory character of this Proclamation and that in that respect it is an advance on the present practice, may I ask the right hon. Gentleman whether it would not be desirable to say that there should be a right of appeal to the courts in all cases and whether he can give us an assurance that political refugees from 'the Union of South Africa will not be returned to Chat country?

Mr. Alport: The hon. Member is aware that there is another Question on this subject later, on which I hope to answer the right hon. Member for Middlesbrough, East (Mr. Marquand).

Mr. Hale: Is it not now clear that the continuation of the office of High Commissioner within the Union of South Africa makes it virtually impossible both for the political refugees in these Territories and for the inhabitants of the Territories to exercise the constitutional right of access to Her Majesty?

Mr. Alport: No, Sir. By no means. The position of the Resident Commissioner in each of the Territories is a very important one and their positions and responsibilities are often overlooked by hon. Members in this House.

Mr. Brockway: The hon. Gentleman said that I was aware that there was a Question to be asked later covering the point that I made in my supplementary question. I am not aware that there is any Question to be asked later covering the point of an appeal to the courts.

Mr. Alport: I have already given an Answer to the hon. Gentleman on that, but I assure him that this does not depart from the provisions of the existing Proclamation with regard to entry and residence in the Protectorate. There is no appeal from decisions on those matters to the courts, except, as I said in my Answer, in circumstances where persons are deemed to be prohibited immigrants.

Oral Answers to Questions — BECHUANALAND

Agricultural Officers

Mr. Emery: asked the Minister of State for Commonwealth Relations how many full-time agricultural officers are now employed in the Bechuanaland Protectorate.

Mr. R. Thompson: In the Bechuanaland Protectorate there are five posts of agricultural officer, of which one is at present vacant. The vacancy has already been advertised. There are also seven agricultural and livestock officers, all of whom have diplomas in agriculture, and 108 agricultural demonstrators.

Mr. Emery: I thank my hon. Friend for that reply. Does he believe that this is an adequate number to be able to deal with the agricultural problems in the Bechuanaland Protectorate? Will he do everything in his power to see that that number is increased?

Mr. Thompson: We are certainly very alive to this problem. It is proposed to increase the number of agricultural demonstrators to 113, and other proposals are also under consideration.

Capital

Mr. Emery: asked the Minister of State for Commonwealth Relations whether he will designate a suitable town within the Bechuanaland Protectorate as the capital, so that the capital may lie within the borders of the Protectorate.

Mr. R. Thompson: Whilst there would be some advantage in having the headquarters of the Bechuanaland Protectorate Administration located inside the Protectorate, a move would also involve some disadvantage, in particular substantial capital expenditure and higher recurrent expenditure than at present. My noble Friend considers that other objects deserve a higher priority.

Mr. Emery: I again thank my hon. Friend for his reply, but may I ask whether he realises that this is the only country in the world where in fact the headquarters of the Government are outside their own territory, and that there are certain people living in the territory who are in fact emigrants who are not allowed into South Africa and therefore cannot go to the capital of their own country?

Mr. Thompson: I appreciate the force of my hon. Friend's contention. As I have said, a move would undoubtedly have advantages, but the Government have inherited the present position which arises from past history, and we have to consider the matter in the light of the


finance available to undertake various desirable projects, and the Protectorate needs every penny it can get at this time for economic development, improved education, and health services.

Oral Answers to Questions — COMMONWEALTH AND COMMON MARKET

Mr. Wade: asked the Prime Minister what discussions he has had with the Commonwealth Prime Ministers during their Conference on the subject of the closer relationship of Great Britain and other Commonwealth countries with the countries of the Common Market; and what has been the outcome of such discussions.

Mr. R. A. Butler: I have been asked to reply.
I would refer the hon. Member to what I said in answer to Questions on 17th May.

Mr. Wade: As the division of Europe into two separate economic blocs is clearly not in the best interests of the Commonwealth and may adversely affect some Commonwealth countries, will the right hon. Gentleman consult his right hon. Friend the Prime Minister about the steps to be taken to follow up the discussions of the Commonwealth Conference with a view to the ultimate creation of a larger Common Market to include Britain, Europe and the Commonwealth?

Mr. Butler: I think I can quote the words of the Prime Minister of Australia. Speaking in London on 28th April he said:
We want to see the highest possible measure of unity. We do not want to see it at the sacrifice of matters that are important to you and are important to us.
Provided we agree on that and do not do away with Commonwealth free entry, which might otherwise be in danger, certainly we shall do our best to get constructive unity in Europe.

Oral Answers to Questions — HEADS OF GOVERNMENT (PARIS MEETING)

Mr. Zilliacus: asked the Prime Minister (1) if he will raise at the Summit Conference the question of finalising the provisional agreement reached at Geneva for a moratorium on nuclear tests accompanied by joint experiments to improve the existing methods for the control of underground tests; and if he will propose that all governments concerned refrain from conducting such tests until the agreement is concluded;
(2) whether, in order to reduce the tension and danger to the success of the Summit Conference resulting from the U2 incident and its aftermath, he will remind his fellow-members of the Conference that they are also fellow permanent members of the Security Council of the United Nations, and propose that the four powers enter into a joint agreement to act in accordance with the principles, purposes and obligations of the United Nations Charter in their mutual relations, and initiate discussions on a code of conduct to implement this undertaking.

Mr. R. A. Butler: I have been asked to reply.
I think it would be better to await the statement which my right hon. Friend will be making tomorrow about the events of the last few days in Paris.

Mr. Zilliacus: I appreciate that in their present form these Questions are merely flowers on the grave of the Summit Conference, but would not the right hon. Gentleman, in connection with the whole situation, consider making the proposal in the first Question to the Nuclear Tests Conference at Geneva, and the possibility of making the proposal in the second Question to the Security Council of the United Nations when this matter comes up there?

Mr. Butler: Technical discussions on these matters are actually continuing at Geneva, so there is certainly no objection to my bringing to the attention of my right hon. Friend the beautiful language and the ideas of the hon. Gentleman.

UNION OF SOUTH AFRICA AND HIGH COMMISSION TERRITORIES

The following Question stood upon the Order Paper:

Mr. MARQUAND: To ask the Minister of State for Commonwealth Relations what requests he has received from the Government of South Africa for the return to the Union of persons who have taken refuge in the Protectorates of Swaziland, Basutoland, and Bechuanaland; and if he will make a statement.

The Minister of State for Commonwealth Relations (Mr. C. J. M. Alport): With permission, I will now answer Question No. 44.
None, Sir. I assume that the right hon. Gentleman has in mind recent Press reports of statements made in the South African House of Assembly. The High Commissioner was immediately asked to forward the official record and to seek from the South African Government an elucidation of what was said.
No negotiations are in progress with the South African Government on this subject. The border between the High Commission Territories and the Union is and always has been open, subject to the immigration laws in force from time to time. A small number of people have arrived in the territories from the Union in recent weeks. Some of them have said that they have come for political reasons.
It is not the intention of Her Majesty's Government to compel them to return to the Union on political grounds, though the House will recognise that the question of return to answer criminal charges would be a matter for the courts.

Mr. Marquand: Is the hon. Member aware that that answer seems to be well in line with the traditions of British justice? Can he give a similar assurance that any persons who have sought refuge in these territories will not be impeded if they wish to go elsewhere?

Mr. Alport: I have replied to this question on previous occasions and have assured the House that there is no restriction upon moving out of the High Commission Territories, although I realise that a problem arises for

individuals after they have left the territories concerned. If the right hon. Gentleman would care to put down a Question on the subject I will try to give him a fuller answer.

Mr. Marquand: Will the Minister also undertake to consider any representations made to him upon this matter, not only by me but by other Commonwealth Governments?

Mr. Alport: Yes, Sir.

Mrs. Castle: Is the hon. Member aware that one of the difficulties which refugees face in leaving High Commission Territories is that they normally have to be in transit through the Federation? Is he also aware that I have brought to his attention the case of one refugee who was anxious to get to Ghana and was asking for papers and assurances that he would not be arrested in the Federation, and that the hon. Gentleman's Department has done nothing to assist that refugee? Cannot he take steps to approach the Federation Government to make sure that "in transit" facilities will be granted in all these cases?

Mr. Alport: Questions of entry into and exit from territories of the Commonwealth, including the Federation, are matters for the Governments concerned, but it has already been made quite clear that anyone coming to the United Kingdom will be dealt with by my right hon. Friend in accordance with the normal practice in this country in these matters.

Mr. Grimond: I welcome the categorical assurance from the Government that refugees are not to be returned to South Africa. Can the Minister say, from his examination of the record, if it is true that the Prime Minister of South Africa said that the state of emergency would be maintained in South Africa until these refugees were returned? If so, can he say whether any representations have been made about this extraordinary statement?

Mr. Alport: I understand that the facilities for the appearance of the official record in the Union of South Africa are not as good as they are here, and that some time elapses before it is published. My noble Friend will study the record when it comes. I believe


that the statement was attributed to the Minister of Justice, during the Committee stage of a Bill in the Union Parliament.

Mr. Dugdale: I recognise that the Federation has powers in this matter, but will the hon. Member undertake to see that representations are made to the Federal Government of Rhodesia in order that transit permits shall be granted?

Mr. Alport: The question of granting transit permits is not relevant to this case. No question of visas is involved. It depends upon the character of the documents available to the traveller when he reaches the Federation.

Mr. Albu: I believe that the Minister said that cases concerning criminal charges will be subject to appeal to the courts. Does this include criminal charges under recently passed South African legislation?

Mr. Alport: That would be a matter for the courts to decide in accordance with the interpretation of the fugitive offenders' legislation.

Mr. Marquand: This is very important. Will the Minister distinguish between what he has said already, namely, that political offences would not be regarded as crimes for this purpose, and the fact that South Africa has passed a Prohibition of Communism Act, which appears to make political offences criminal offences? Will he distinguish between offences under that Act and normal criminal offences, which, we agree, must be handled in a different way?

Mr. Alport: The right hon. Gentleman will not expect me to give a judicial interpretation of legislation, nor is it right for a Minister at the Dispatch Box to try to do so. The right hon. Gentleman's attention can perhaps be drawn to Section 19 of the Fugitive Offenders' Act, which contains provisions with regard to general equity in matters of this sort.

Mr. Gaitskell: The hon. Member said that refugees would not be sent back on political grounds. This is a very important point. If South African legislation makes political action a criminal offence, does that in any way weaken the hon. Gentleman's assurance that only persons who may be charged under the criminal code as at present

existing in South Africa will be sent back?

Mr. Alport: I should like to give further thought to that matter, but as I understand it, consideration and interpretation of this Act would be in accordance with the normal principles of English justice, and not related to the justice in any other country.

Mr. S. Silverman: Would not the difficulty be solved if the hon. Gentleman undertook that no one would be returned in this way who would not be returned under the relevant provisions of either the Fugitive Offenders' Act or the Extradition Acts, in which safeguards exist against the extradition of a refugee on what might be a quasi-criminal charge?

Mr. Alport: The hon. Member may realise that the Extradition Act does not apply to Commonwealth countries. In this case we are bound by the law which is operative in the territory at the time. The House will probably recognise that in the past, in our history and in the history of other countries, the courts have proved to be staunch defenders of freedom and justice.

BUSINESS OF THE HOUSE

Mr. Gaitskell: May I ask the Leader of the House to state the business for next week?

The Secretary of State for the Home Department (Mr. R. A. Butler): Yes, Sir. The business for next week will be as follows:
MONDAY, 23RD MAY—Consideration of private Members' Motions until seven o'clock.
At seven o'clock, as the House is aware, the Chairman of Ways and Means has set down opposed Private Business for consideration.
When the Private Business has been disposed of we shall proceed with the Committee and remaining stages of the Ghana (Consequential Provision) Bill; the Commonwealth Teachers Bill, and the Merchant Shipping (Minicoy Lighthouse) Bill.
TUESDAY, 24TH MAY, WEDNESDAY, 25TH MAY, and THURSDAY, 26TH MAY— Committee stage of the Finance Bill.
FRIDAY, 27TH MAY—Consideration of Private Members' Bills.

Mr. Gaitskell: As I believe the right hon. Gentleman is aware, there is a desire on both sides of the House to debate the collapse of the Summit Conference. Will he find time for an early debate on this matter, preferably next week, and make the necessary adjustments?

Mr. Butler: I propose to discuss the suggestion made by the right hon. Gentleman with my right hon. Friend the Prime Minister this evening. Perhaps we may then have discussions through the usual channels.

Mr. Grey: Has the right hon. Gentleman seen the Motion on the Order Paper in the names of my hon. Friends and myself concerning a statement by the Minister of Education to the effect that in the matter of the reorganisation of schools the County of Durham was the worst county in the country, and that this was perhaps due to the fact that the local authority has been in the hands of the Labour Party for a considerable time? So that the Minister of Education may substantiate what he said, or withdraw it, may we have a chance to debate this matter?

[That this House is of the opinion that the remarks made by the Minister of Education concerning Durham Council Local Education Authority, to the effect that the reorganisation of schools in the county was the worst in the whole country due to the control of the local authority over many years by the Labour Party, are inaccurate and misleading; that they impute infficiency to a local authority which has an unequalled record of educational advance; that they fall well below the standard expected in public comment by a Minister of the Crown; and, for these reasons, calls upon the Minister to withdraw publicly his allegation.]

Mr. Butler: I do not see any early opportunity of debating the Motion. I understand that my right hon. Friend the Minister of Education, in response to a message from the authority, has said that he would see the authority. So far, he has had no answer.

Mr. Grimond: As well as a debate on the outcome of the Summit Conference, would the Leader of the House consider whether we should not have a debate on the result of the Commonwealth Prime Ministers' Conference? Also, is there

any intention of making a statement on the situation in Cyprus fairly soon?

Mr. Butler: The answer to the hon. Member's question about Cyprus is in the negative.
It would seem very difficult to find an opportunity for a debate on the Commonwealth Conference before the Whit-sun Recess. This is a matter which we shall discuss, but I do not want to raise false hopes.

Mr. Grey: On a point of order, Mr. Speaker. I wish to refer again to the statement about the County of Durham which was made in the House by the Minister of Education. We take it from the Leader of the House that one of the reasons why we cannot have a debate on the matter is that the Minister of Education has decided to meet the Durham County Council. Surely it may be assumed that if a statement is made in this Chamber the House has a right to debate the matter.
Mr. Speaker: No such principle is known to me and I do not observe any point of order here.

Mr. Hale: Is the right hon. Gentleman aware—I am sure that he will hear it with regret, if he is not—that after spending all of last Friday facilitating the passage of Bills promoted by Tory Members, objection was taken to every Bill promoted by a Labour Member of Parliament? As the Bills to which exception was taken included the Cotton Industry (Compensation for Redundancy) Bill, designed to permit the President of the Board of Trade to do what I know that in his heart he would like to do— answer questions about over 2,000 claims rejected or deferred, which are causing great hardship in Lancashire— and as the Table still relies on the quaint and archaic rule which presumes that Ministers still tell the truth and that it has survived even the public claim of the Minister of Transport that Ananias is not in the same street, would he consider giving time for a debate on this issue or facilitating the consideration of the Bill?

Mr. Butler: The hon. Member has had an unfortunate time with his Bill and I am glad that he adopted so generous an attitude towards the Bills promoted by hon. Members on this side of the


House—no doubt that was because of their merits. But I cannot offer him any time, nor can I comment on truth.

Mr. Popplewell: Further to the question raised by my hon. Friend the Member for Durham (Mr. Grey), would the Leader of the House ask his right hon. Friend the Minister of Education—after he has met representatives from the County of Durham—to make a statement to the House? The Minister of Education delivered a studied insult in this House to one of the finest education authorities in the country. Therefore, would the Leader of the House, on behalf of all hon. Members, whom he represents, ensure that his colleague makes good the evil that he has already done?

Mrs. White: While we accept that this is not a point of order, surely it is a matter for the right hon. Gentleman, as Leader of the House, to protect the interests of hon. Members. This is a most extraordinary statement to have been made by the Minister of Education and I think that the least that hon. Members who represent constituencies in County Durham can expect is a proper statement in this House.

Mr. Butler: At business time, and in answer to business questions, I cannot go into the merits of each particular case. I know that the object of my right hon. Friend is to effect an improvement in primary education wherever that may be possible. I think that we had better await the result of the talks between my right hon. Friend and the Durham County Council before taking any further steps.

Dame Irene Ward: On this controversial issue, may I ask my right hon. Friend whether he is aware that the North-East Coast generally has not had all the grants and moneys made available to other parts of the country, and that if we have any difficulty—

Mr. Speaker: Order. This sounds unduly like a reference to the merits of a problem, and this is the time for business questions.

Dame Irene Ward: I was coming to the point, Mr. Speaker. I was about to ask my right hon. Friend whether we

could not resolve this difficulty by having a debate, whether he would find time for a debate about the amount of money made available to us on the North-East Coast for educational purposes.

Mr. Speaker: The hon. Lady constantly inspires me with hope and I am sorry that I stopped her too soon.

Dame Irene Ward: May I have an answer to my question?

Mr. Butler: I wish that we could find time for such a debate. I will certainly draw the attention of my right hon. Friend to my hon. Friend's question.

Mr. F. Noel-Baker: The Leader of the House told the hon. Member for Orkney and Shetland (Mr. Grimond) that there is no chance that we shall have a statement soon on Cyprus. For a long time an Order of the Day on the Order Paper has been the Second Reading of the Cyprus Bill, which is unlikely to be reached for many weeks. In view of the desperately dangerous situation on the island, the danger that the whole basis of the recent agreements may be overtaken by events and the grave political, economic and other difficulties which exist there, would not it be right for us to have a statement in the near future and, indeed, a debate? Is not the House of Commons entitled to discuss this very important and grave matter in the near future?

Mr. Butler: Obviously, this is a matter of the highest importance. I think that a statement must depend on the progress made in the negotiations. Naturally, if there is a statement which can usefully be made, it will be made.

Mr. Gaitskell: Although we are happy that the discussions are still continuing in Cyprus, there will come a point when we shall require to discuss this business if satisfactory progress has not been made.

Mr. Gresham Cooke: I do not think that my right hon. Friend followed his usual practice of announcing the business for Monday week, 30th May. Is he in a position to do that?

Mr. Butler: On this occasion, it would be unwise to decide finally on the business for Monday week until I have met


my right hon. Friend this evening and also had a discussion, through the usual channels, about the way we shall use the time before Whitsun in relation to the requests which have been made.

Mr. Chetwynd: Reverting to the point raised by my hon. Friend the Member for Durham (Mr. Grey), is the right hon. Gentleman aware that criticisms of the Durham County Council were made in this House and that they should be answered in this House? My hon. Friend's Motion calls for a withdrawal and an apology. If we do not get that from the Minister of Education, is the right hon. Gentleman aware that we shall not withdraw from the Chamber— as has been done in other places—but that, on the contrary, we shall harass the Minister all we can?

Mr. Butler: I think that I had better hastily warn my right hon. Friend of the dangers threatening him.

Mr. Hannan: May I ask the right hon. Gentleman what further consideration he has given to the Motion on the Order Paper, supported by all hon. Members on this side of the House who represent Scottish constituencies, referring to the high rate of unemployment in Scotland? Has he consulted his right hon. Friend the Secretary of State for Scotland, as he said last week that he would? If so, as a result of these conversations, may we be given an early date on which to debate the matter?

[That this House, while welcoming the efforts being made to induce development of private industry in areas of high unemployment, believes that where those efforts prove insufficient it is the duty of Her Majesty's Government to bring full employment to those areas by setting up and operating publicly owned enterprises.]

Mr. Butler: I am in constant consultation with my right hon. Friend, because this matter is so frequently brought to my attention. I have already announced the opportunities that may be taken for discussing this important question.

Mr. Short: Will the Leader of the House bear in mind that one of the Bills which again was blocked last week by his hon. Friend was the Public Service Vehicles (Travel Concessions) Act, 1955 (Amendment) Bill? As this Bill may be

discussed again tomorrow, and as it involves travel facilities for blind, disabled and aged people, will the right hon. Gentleman try to instil a little humanity in the hearts of his hon. Friends? If that proves impossible will he give time for the consideration of the Bill?

Mr. Butler: I cannot add to what I have said, nor can I control private Members.

Mr. Manuel: The right hon. Gentleman can.

Mr. M. Stewart: The Leader of the House says chat he cannot control his hon. Friends. Is he aware that some of them allege that they object to Bills promoted by hon. Members on this side of the House not because they know what is in the Bills, but because they have been instructed to do so by the Government?

Hon. Members: Answer.

Mr. Butler: I cannot add to the answer I have already given, namely, that this is a free House and a free country.

UNITED KINGDOM AND NIGERIA (MINISTERIAL DISCUSSIONS)

The Secretary of State for the Colonies (Mr. Iain Macleod): With permission, I will make a statement on discussions with Nigerian Ministers which ended today.
The primary object was to settle a number of points in the drafting of the Constitutions for independence, but other matters were also dealt with. The Commonwealth Secretary discussed the scheme for technical assistance to Nigeria and the Minister of Defence and I discussed with the Federal Ministers, the Regional Premiers and. the President of the Senate the proposed Defence Agreement which was first considered in 1958.
I am glad to say that all these discussions, which were throughout most cordial, were entirely successful and that we reached complete understanding and agreement on all points.
The conclusions on constitutional matters will be embodied in a draft Order in Council which will be laid


before Her Majesty before the end of the summer. The Nigerian representatives stated that if, after the plebiscite to be held next February, the Southern Cameroons joined Nigeria it would be with the status of a fully self-governing Region, while the Northern Cameroons would form part of the Northern Region and the local government arrangements recently introduced there would continue. Nigerian troops will be withdrawn from the Cameroons before 1st October. Should it be necessary, they will be replaced by United Kingdom forces during the remaining months of trusteeship.
On defence, each country will give the other assistance in mutual defence. We will help Nigeria over training, equipment and supplies and the two countries will give each other staging facilities for aircraft. They do not for this purpose seek any concessions of land, but are content to rely on mutual good will.
I need hardly say that there is, of course, no question of establishing a British base in Nigeria. The agreement on defence, certain details of which still have to be worked out, will be signed after independence and will not come into force until thereafter it has been ratified by both Governments. In the case of Nigeria, this will involve a resolution being passed in both Federal Houses approving its terms.
I was very happy to be able, in the course of the discussions, to inform Nigerian Ministers of the decision of the Commonwealth Prime Ministers that when Nigeria becomes independent she will become a full member of the Commonwealth. This was received with acclamation.
The United Kingdom Bill to provide for Nigerian independence will, I hope, be introduced into the House after the Whitsun recess. Members of all parties will, I am sure, give it a warm welcome.
I am giving further details of the discussions in a Written reply today to a Question by my hon. Friend the Member for Liverpool, Wavertree (Mr. Tilney).

Mr. Gaitskell: The House will have heard the Minister's statement with much satisfaction. We shall have an opportunity of discussing the Bill for Nigerian

independence a little later, but, meanwhile, I am sure that I speak for all of us when I say how warmly we welcome Nigeria as a full member of the Commonwealth.
May I ask the Secretary of State one question? I understand from the Press that there have also been economic negotiations with Nigeria. I do not think that he referred to those in his statement. Could he say something about them?

Mr. Macleod: The economic negotiations, in the first place, were rather formal. It was just the signing of a Commonwealth assistance loan for—if I remember rightly—£12 million, and secondly, the discussions were, in a sense, economic, because we hope to be able to assist Nigeria with experts and various other forms of technical assistance after independence.

Mr. Tilney: While congratulating my right hon. Friend on the smooth course of negotiations with our old friends in Nigeria, to whom hon. Members on both sides of the House wish well on her coming independence, may I ask him to bear in mind that, although £12 million sounds a large sum, it is. in fact, only 7s. 6d. per head of the population there, where the national income is very low indeed? Has he any other plans to help this emergent territory economically?

Mr. Macleod: Not immediately, but, naturally, Nigeria will become eligible not only for Commonwealth assistance loans, but for the other forms of loans and assistance which are available on a Government-to-Government basis. As my hon. Friend has truly said, and as, also, the Leader of the Opposition said, the Nigerian people are among our staunchest friends and we shall be very anxious indeed to help them.

Mr. R. Edwards: Has there been any change in the electoral register in the Northern Cameroons, because when the last vote was taken there all the women, very intelligent African women, were completely excluded? What would happen in that territory if the plebiscite went against federation with Nigeria in both the Northern and Southern Territories of the Cameroons?

Mr. Macleod: The question to be put to the North and South Cameroons is identical. The people are to be asked


whether they wish to achieve independence as part of Nigeria or as part of the Republic of Cameroun. I have stated what will happen if they vote in favour of Nigeria and we hope to obtain through the Republic of Cameroun the precise circumstances which would apply if the vote went in favour of a choice of Cameroun. That is the only choice. I think that the plebiscite is to be on 11th February next year. Perhaps the hon. Member would like to put a specific question on the election arrangements for the North.

Mr. N. Pannell: While welcoming the arrangements, may I ask my right hon. Friend whether he will not exclude the possibility of the southern part of the Northern Cameroons which is contiguous with the Southern Cameroons becoming a separate entity with the Southern Cameroons?

Mr. Macleod: I understand the point, but I do not think that is within our competence, because the terms of reference of this plebiscite have been laid down by the United Nations and I do not think that it is possible for us to alter them.

Mr. Stonehouse: Is the right hon. Gentleman aware that there has been much speculation in the Nigerian Press about the establishment of a military base at Kano? Do I understand that

the proposals for the establishment of that base have now been completely dropped?

Mr. Macleod: It was thought originally, when the matter was first discussed a year or two ago, that it would be appropriate for Nigeria to lease some land to this country on which if we wanted we could construct additional facilities. We have decided not to ask them for that and that was very much welcomed by the Nigerian Ministers.

Mr. Hector Hughes: As it is agreed on all sides, in Nigeria and here, that Nigeria owes much to the service of administrative officers and other civil servants in Nigeria, what steps are being taken to encourage British administrative officers and civil servants to remain in Nigeria until she is able fully to man the services herself?

Mr. Macleod: Questions relating to the public services are, I agree, of great importance, but they do not arise out of this statement because they were considered, and the terms of the agreement were published, following the two earlier conferences held in 1957 and 1958. We did not, therefore, discuss public service matters this time, but I know that it is the wish of the Prime Minister and Premiers of Nigeria that many civil servants should stay to help them in the years ahead.

Orders of the Day — FINANCE BILL

Considered in Committee [Progress, 18th May].

[Sir GORDON TOUCHE in the Chair]

Clause 13.—(CHARGE OF INCOME TAX FOR 1960–61.)

Motion made, and Question proposed, That the Clause stand part of the Bill.

3.58 p.m.

Mr. G. R. Mitchison: This Clause repeats the same arrangements for Income Tax and Surtax as we had last year and serves as a reminder that Income Tax and Surtax are annual charges. I have no quarrel with the rates, and for the moment I want to confine myself to two general observations.
If it were not mitigated by allowances, Income Tax would be a highly regressive tax and the object of allowances is to make it more progressive. The higher the proportion of the relief which can be given by way of allowances, the more progressive the result. When one looks at the last available Report of the Commissioners of Inland Revenue one finds that the number of individuals whose incomes were above the effective exemption limit for the ten years up to 1958–59 remained roughly constant, but the number who have been relieved from tax by the operation of allowances has fallen by about 1½ million and there has been a consequent rise in the number chargeable with tax. That shows a tendency over these years to make concessions in such a form that the allowances do not preserve their progressive effect.
During recent years, and I take simply the last three, the balance in successive Finance Bills between direct allowances, that is to say, allowances or reductions of tax, and allowances by personal and similar allowances has been very uneven. In the 1958 Budget, the personal allowances amounted to only about £5 million. In last year's Budget—the General Election Budget—there was a reduction in the rates of tax which resulted in £229 million less for the Exchequer, and in this year's Finance Bill the personal allowances of the character I have indicated amount to

under £9 million. The effect of the last three years, therefore, must have been to continue the tendency that appears in the Commissioners' figures and to weigh the balance even more against an increasingly progressive tax.
We on this side of the Committee take the view that Income Tax ought to be not decreasingly but increasingly progressive, and we feel that in recent years, and over the run of years, not enough has been conceded by way of allowances. It is for that reason that in Committee on one Finance Bill after another we have put down Amendments and new Clauses seeking to extend the amount and the scope of allowances. We take the very simple view that, after all, if any concession can be spared from the Exchequer, it ought to go to relieve people at the bottom of the Income Tax scale, and, primarily, to see whether we can take them out of it altogether. Figures show that the number so getting out has tended to fall. Secondly, if we cannot do that, at least there should be concessions in the scope and amount of the allowances granted.
That is not to say that the Chancellor ought to vary the rate which he imposes under this Clause, but simply to comment on this increasing tendency, and to say that it is about time that the allowances received a substantial increase, and that, year by year and over the run of the years, they were given increasing importance. That is, after all, the right way, as we see it, to treat any tax, and certainly this particular one.
I wish to make one other point, and not to take up too much of the time of the Committee. I repeat, I think for the third time, that we make no complaint about the rate of tax this year. I might, perhaps, make one minor personal one, which is that it happens to be a rate that does not facilitate arithmetical operation, but that is not a very serious comment. A time will come, no doubt, when the rate will fall to be changed one way or the other, according to the view of the Government of the day and the economic circumstances of the country. When that happens, I would ask the Chancellor, and through him his successor—if he is not here personally, which is something that many of us would rather regret—to remember that people in


this country, broadly speaking, pay their taxes in three ways.
First, they pay what are commonly called direct taxes, of which Income Tax and Surtax are not the only but the most obvious instances. Secondly, they pay indirect taxes. Thirdly, they pay what does not amount strictly to a tax, but comes to the same thing, and that is rates to the local authorities. I want to say a word or two about these three classes of tax.
First, I do not regard it as a good point in a Budget and in a Finance Bill that, when one looks in the Finance Bill to see the amount of money that is to be raised for the coming year, one finds that the largest amount is raised by an indirect tax. I am not for the moment concerned about the merits or demerits of the tax on tobacco, but, by and large. I think that we start in a critical mood if we find that that is the result of the figures.
Secondly, I turn to rates. A 1d. rate in this country produces between £2½ million and £3 million. It is a little under £2½ million in England and Wales, and the Scottish figure brings it up. Roughly speaking, and very roughly, 1d. off the Income Tax represents about eight or ten times the product of a 1d. rate, and, therefore, any concession that can be made by way of direct grant or direct assistance in one form or another to rates makes a very considerable difference. Rates seem to me to be one of the worst taxes in the world. They have every possible fault, but no practical alternative answer has as yet been found for financing the local authorities with money raised by themselves. We must expect them to continue.
But rates are increasing, and they are increasing while, at the same time, there is an increasing strain on local authorities—a strain both to carry out the necessarily increasing services such as education, and a strain because the money that they require to raise—in this instance, the capital money—has to be raised in present conditions at a very high rate of interest indeed. It is, therefore, not a matter of local authority extravagance, but one of necessity, imposed by the policy of the Government of the day and imposed, no doubt, by changes in the services that are required from the local authorities and other

factors equally inevitable in any civilised country.
It is not the fault of the local authorities that these increases should go on, but there will come a time, I imagine, when the Chancellor will have to look at the balance between the two things, and to recollect, if he has to choose between some reduction in taxation, and, on the other hand, some concession to local authorities which will enable a reduction in rates to be made in lieu of a reduction in taxation, that rates are a singularly bad tax.
They are bad for two reasons. First, from the selective nature of their subject-matter. I am not going into what is obvious to every hon. Member of the Committee—that a tax levied solely on property in that form is bound to lead to anomalies as between one person and another, and, secondly, that they are a bad tax—

Mr. Gerald Nabarro: On a point of order. Could you tell me, Sir Gordon, what steps I may take to debate the local rate structure of this country in due course?

The Chairman: We cannot discuss it on Income Tax. I think that the hon. and learned Member for Kettering (Mr. Mitchison) was referring to alternative methods of taxation.

Mr. Mitchison: I am sorry that I should have disturbed the hon. Member for Kidderminster (Mr. Nabarro), but let me repeat very shortly to him, as perhaps I did not make myself clear, what I was trying to say.
It seems to me that any Chancellor of the Exchequer has the choice at intervals between financing the local authorities to an increasing extent and a tax concession. When it comes to that, all I am saying at present is that I regard rates as a very bad tax indeed, that rates are increasing, and that I hope that when the Chancellor considers this matter he, or his successor, will bear that in mind, and bear in mind, also— and this is the last thing that I have to say—that what the local authorities are doing in this country is, as I imagine the vast majority of the Committee will agree, something which is not only necessary but increasingly necessary if our civilisation is to be maintained at a high level or raised to a higher.
I ought not to have to stand here and talk about the need for higher standards and better facilities for public education, public health, and the like. I will not take up the time of the Committee by doing so. These things are perfectly obvious.
Therefore, to sum up what I have had to say today, it is, quite shortly, this. First, as to Income Tax itself, there has been in recent years, under successive Tory Governments, a tendency for the number of people who are helped out of taxes by the allowances to diminish. That appears from the Commissioners' figures and from the amount in recent Finance Acts. It is a tendency I deplore, because I think that it is sapping the foundations of what should be a progressive and increasingly progressive system of direct taxation.
Secondly, I say that if and when the time comes for changes to be made I hope that it will be remembered that there are three kinds of taxation; that we on this side of the Committee deplore large increases made by indirect taxation, such as the Tobacco Duty increase in this Finance Bill; and that we deplore, too, the increasing tendency for the operations of the local authorities to be made more difficult and to be limited by an increasing rate burden. We feel that the Government should bear these matters in mind when considering the rates of Income Tax in future years.
Let me before I sit down and before the hon. Member for Kidderminster succeeds, if he does succeed, in catching your eye, Sir Gordon, just say one thing— this for the fourth time: we make no criticism of the rates of tax this year. These are comments on the past and suggestions for the future.

Mr. Nabarro: I shall not attempt to follow the hon. and learned Member for Kettering (Mr. Mitchison) into the intricacies of the rating system. Suffice to say that in the speech I made on 5th April, on my right hon. Friend's Budget, I alluded to the unloading of central Government expenditure on to the local authorities and estimated the figure on that occasion at £50 million in the year 1960–61. My right hon. Friend did not refer to that point in his reply.
I differ fundamentally from the hon. and learned Member in my approach to

Income Tax, and let me say at once that I shall criticise my right hon. Friend for maintaining what I consider to be a swingeing rate of direct taxation in the form of 7s. 9d. in the £ as the standard rate for Income Tax. That is one respect in which I differ from the hon. and learned Gentleman, but there is a second. He used the term half a dozen times, a " progressive system " for Income Tax. To my mind, there is no such thing as a progressive system for Income Tax.

Mr. John Diamond: Or anything else.

4.15 p.m.

Mr. Nabarro: Oh, yes—in social philosophy, for example. My social philosophy is definitely progressive. However, there is nothing progressive about Income Tax. All Income Tax is bad. It is something we have to suffer.
I would say that the greater the number of people who have to pay Income Tax within the structure of that tax decided by this Committee, the better. I do not believe that payment of Income Tax should be restricted to a few persons fortunate enough to have substantial incomes. I would spread the net far and wide and not increase the amount of the Income Tax allowances as first priority. I would reduce the standard rate of Income Tax. The more workers, by hand and by brain, who pay Income Tax the greater the sense of social responsibility and the more important the understanding that the National Health Service costs over £700 million a year, that our public education service costs over £700 million a year—and I could go on at length, but not on this occasion—and that Income Tax is one of the major contributory means of financing that huge public expenditure in a social sense, which I do not object to in principle: it is part of the policy on which I am elected to this House.
I want it understood, however, and it would be if I had my way, that by the maximum number of people paying where it hurts most, through the P.A.Y.E. deductions every week, these services are immensely expensive, and that the standard rate of Income Tax, coupled, of course, with the three lower rates on tranches of income, are the principal contributory factors in financing that expenditure.
To what extent are they contributory? Last year, 1959–60, we raised £2,242 million in Income Tax. In the year 1960–61 we shall raise £2,485 million in Income Tax. Notwithstanding the rate remaining by this Clause, at 7s. 9d. in the £, the Chancellor is lifting out of the taxpayers' pockets an additional £242 million this year. It was, therefore, a trifle disingenuous of him to have presented in his Budget speech the picture that he is raising tax by a modest £70 million in this year.
Of course he is not. He is raising it by £70 million on such rates as he has increased for certain specific items, such as the increase in the rate of Tobacco Duty which we disposed of yesterday— disposed of in the wrong way, in my opinion. He raises an extra £70 million by increasing the rates of duty and the rates of taxes. What has been lost on the nation so far is that he is increasing tax this year by £242 million—in his collection of Income Tax by itself, let alone Surtax or death duties or other contributions of that kind.
The growth of the Income Tax and the yield from it in recent years of Tory administration has been stupendous. [Laughter.] This is no cause for laughing on the part of my hon. Friends. They should hang their heads in shame. [HON. MEMBERS: "Why?"] Why? For this reason, that we are collecting this year, 1960–61, £600 million more in Income Tax than we collected when we were re-elected in 1955, partly, of course, due to the rise in incomes, partly due, of course, to inflationary tendencies, but also due to the fact that we have not persisted in reducing the standard rate of Income Tax as rapidly as we ought to have done.

Mr. Denzil Freeth: If my hon. Friend does not propose to finance the expanding social services— upon which, he himself said, he was elected—by getting more money from the taxpayer, and by getting it through obtaining a smaller percentage of a growing national cake, how does he propose to maintain the social services and, at the same time, reduce taxation?

Mr. Nabarro: I will send my hon. Friend the Member for Basingstoke (Mr. Denzil Freeth) a copy of my leading article in the Daily Telegraph on 6th

April, in which I dealt with all these matters.

Mr. Douglas Jay: Mr. Douglas Jay (Battersea, North) rose—

Mr. Nabarro: I will give way to the right hon. Gentleman in a few moments. May I, first, finish answering my hon. Friend the Member for Basingstoke? Then I will gladly give way to any right hon. or hon. Gentleman.
The article was entitled, "Budget Blunders and Why"? It presented an alternative philosphy to that of my right hon. Friend the Chancellor of the Exchequer, resting on a simple proposition, for the benefit of my hon. Friend the Member for Basingstoke, that by reducing rates of direct taxation such larger incentives are furnished as to cause the Chancellor of the Exchequer's revenue to increase in the aggregation. I hope that my right hon. Friend will not shake his head as a negative, because that was the policy enunciated year after year from the Opposition benches between 1945 and 1951, when the Tories were trying to tip the Labour Party out.

Mr. Jay: As the hon Member for Kidderminster (Mr. Nabarro) said, "leading article in the Daily Telegraph", will he tell us whether he now claims to write all the leading articles in the Daily Telegraph, whether signed or not, or only the ones signed by himself?

Mr. Nabarro: I am sorry if I used the word "leading". I am not a journalist. I am only an amateur. I meant the main article, the signed article, the feature article. I repeat that I am not a journalist. I cannot be everything to all men all the time.

Mr. John Hall: I am grateful to my hon. Friend for giving way for the third time. If, as a result of the feature of his feature article, the principle adopted was that by reducing the standard rate of taxation the Chancellor would be able to obtain greater revenue from taxation, would not that be doing precisely what my hon. Friend is now complaining of, namely, taking more money in taxation out of the pockets of the people?

Mr. Nabarro: There is rising expenditure, which has to be financed by divers means. I have already said that the


increased yield of Income Tax has been £600 million over the last five years. It is due partly to inflation, partly to rising incomes, and partly to the fact that we have not reduced the standard rate fast enough. What I quarrel with is the claim of my right hon. Friend to have increased tax this year by only £70 million, whereas, in fact, Income Tax by itself is admitted to rise by £242 million.
In this country today there are 18 million Income Tax payers. In 1939, twenty years ago, there were 3·8 million. Not only has the number of Income Tax payers multiplied by five times in twenty years, but the yield of Income Tax has multiplied by more than that in twenty years. In 1939, the yield was £400 million. Today, the yield is £2,242 million in the year 1959–60, and is budgeted at £2,485 million in the year 1960–61.
The best that can be said for the Conservative record in this matter is that it is infinitely better than the record of the Socialists. When we inherited office in 1951, the standard rate of Income Tax was 9s. 6d. in the £. In 1953, it was reduced by 6d. to 9s. in the £. In 1955, it was reduced by a further 6d. to 8s. 6d. in the £.
This is what I want to draw particularly to the attention of my right hon. Friend, whether he is the incumbent of the office of the Chancellor of the Exchequer in 1964 or not. We had to wait from 1955, when the standard rate was reduced to 8s. 6d. in the £, until 1959— four years—for a reduction of 9d. in the standard rate to bring it down from 8s. 6d. to 7s. 9d. We had to wait for four years. We had to wait from the eve of the 1955 General Election to the eve of the 1959 General Election.
Last weekend, in his constituency of Tiverton, Devonshire, my right hon. Friend proclaimed himself as not being interested from a personal point of view in the next General Election. I hope that that will not colour his judgment in the immediate future. I do not like reduction in the standard rate of Income Tax coinciding with a period immediately preceding a General Election. I want a modest reduction in the standard rate of Income Tax steady, every year. I am not alone in this. I am backed by powerful colleagues on the Conservative benches.

Mr. Ede: They do not vote with the hon. Member.

Mr. Nabarro: I am not the keeper of their consciences in fiscal matters. I am only the keeper of my own conscience.

Mr. C. W. Reynolds: That is a full-time job.

Mr. Nabarro: It is a full-time job. I hope that the hon. Member for Islington, North (Mr. Reynolds) finds it a full-time job looking after his own conscience. Judging by his behaviour in the House of Commons, it ought to be. My fiscal conscience belongs to me alone, and I know how to vote in financial matters. However, I propose to allude to the fact that I have powerful allies on the Conservative side of the Committee in the matter of reducing the standard rate of Income Tax.
Therefore, I hope that the Chancellor of the Exchequer or the Financial Secretary will not take the view, in replying to the debate, that I am advancing a highly individualistic line not representative of the views of the Conservative Party. There is grave disappointment that there was no reduction in the standard rate of Income Tax this year. I do not believe in the philosophy of " pie in the sky by and by", or "on the eve of a General Election". I believe that there should be a little off the standard rate of Income Tax every year.
I was quite modest before the last Budget. I said that the Chancellor of the Exchequer should take 3d. off the standard rate, thereby reducing it to 7s. 6d. When the Chancellor decided last year to reduce the standard rate to 7s. 9d., I had a good deal to say on the point made by the hon. and learned Gentleman about the clumsiness of the rate of 7s. 9d. I spoke about the difficulties of calculation, with none of which the Chancellor agreed. He is so much better than I am, both at mental arithmetic and in the use of a slide rule.
The 3d. off the standard rate which I recommended this year was greatly outdone by my colleagues. I refer at once to my hon. Friend the Member for Portsmouth, Langstone (Mr. Stevens), a powerful colleague in financial and fiscal matters, vice-chairman of the Conservative Parliamentary Finance Committee, and chairman of the Income Tax Payers' Society.
My hon. Friend the Member for Lang-stone wrote to my right hon. Friend the Chancellor of the Exchequer before his Budget in these terms:
My dear Chancellor,
The financial out-turn in the first nine months of the current year shows very clearly that the reduction of 9d. in the standard rate"—
that was in 1959—
has. indeed, had a most beneficial effect on the economy of the country, and the Executive Committee of this Society"—
that is, the Income Tax Payers' Society—
have no hesitation in urging you to a further reduction.
The first of the Income Tax recommendations my hon. Friend made in his letter reads as follows:
The standard rate of Income Tax on the incomes of private individuals should be reduced in the next four years to 5s. in the £. This means an average yearly reduction of about 8d. Accordingly, the Executive Committee strongly urges you in your forthcoming Budget at least to reduce the standard rate to 7s. and thus take the first step towards reaching this objective.
4.30 p.m.
My hon. Friend is three times as forthcoming as I am—three times as dashing. I proceed at the rate of 3d. in the £ off the Income Tax this year. He proceeds at the rate of 9d. in the £ off the Income Tax this year, but he sets his eyes on a distant horizon. He says, "Then, reduce the rate to 5s. in the £ within the next four years." A jolly good objective, but I hope that those of my hon. Friends who were indicating some dissent from my words a few moments ago will not now consider that I am being too cautious, when my distinguished friend the Member for Langstone offers three times as much to his society—of which, of course, I am a member, and to which I send him an annual subscription— [Interruption.]
An hon. Member suggests that I should be made president of the society, tout no, they would not have me as president—I am much too modest in Income Tax matters. I only want 3d. off the standard rate of Income Tax this year, but my hon. Friend wants 8d.— [HON. MEMBERS: "Ninepence."] No, 8d. I am sorry; my hon. Friend called for an

average yearly reduction of 8d. and, for this year—a penny over the odds—9d. off.
Let me fry some larger and more succulent fish. My right hon. Friend the Member for Monmouth (Mr. Thorneycroft) wrote an article in the April, 1960, issue of an important journal called the Director, which is the house journal of the Institute of Directors. My right hon. Friend, is of course, a member of the Institute, and carries all the authority of an ex-Chancellor of the Exchequer. Of course, I am a member of the Institute of Directors, as well—[Interruption.] Yes, I pay a subscription, and it is chargeable against tax, as is known. I am not obliged to admit these things, but I am trying to draw attention to the fact that I have powerful allies in my theme today.
Here is what my right hon. Friend wrote in the April, 1960, edition of the Director:
If the public—and, because of the public, the politicians—could really make a stand on public spending, the chances of tax relief would alter overnight. Secondly, I would advise industry to look at a Parliament rather than a Session. Tax relief today should be looked at by those who study it as a five-year exercise. We should be asking ourselves not simply what we would like from a fairy godmother this year, but what we would reasonably expect to get over the full five-year period. It is perhaps particularly apt that we should do so this year with a Conservative administration recently returned with an increased majority and presumably including among its aims some measure of tax relief".
We have not had it this year—

Sir Jocelyn Lucas: Hear, hear.

Mr. Nabarro: My hon. Friend the Member for Portsmouth, South (Sir J. Lucas) says "Hear, hear", but all we have had is increased tax—

Mr. James Dempsey (Coatbridge and Aidrie): What about vintage port?

Mr. Nabarro: I do not drink vintage port.
My right hon. Friend the Member for Monmouth goes on with this very graphic paragraph. I think that the Committee should hear it, because all hon. Members of the Committee are not members of the Institute of Directors,


and may not, therefore, read this journal. My right hon. Friend says:
The view is held that so long as any spare capacity can be found anywhere, the Government's principal task is to flog the economy along the road at the best speed it can muster; stop whipping the poor horse—
Stop whipping the poor horse, indeed!
for an instant, and it will halt and start eating grass at the side of the road.
The fact that this method of driving has already brought the wretched animal to its knees on a number of occasions deters its advocates not at all. The great thing, they say, is to keep the brute moving, and a sharp reduction in Income Tax might add a succulent carrot to the other inducements already being applied.
My right hon. Friend continues in that vein for several pages—the need for tax reduction, notably Income Tax—and then he postulates that over a five-year Parliament there should be a total reduction of £1,000 million in taxes, of which £470 million should be a reduction in the Income Tax. He uses these words, speaking of the standard rate of Income Tax:
An average reduction of 3d. a year. Present cost about £94 million. Should be a reasonable demand on any sound Administration.
That is, each year for five years.
I hope that my hon. Friends who groaned dissent a few moments ago will not imagine that I am talking in a highly individualistic fashion today, when I call in aid my right hon. Friend the Member for Monmouth, and when I call in aid my hon. Friend the Member for Lang-stone, who, in principle and in purpose, are entirely at one with me in these important matters.
What I want to know is: when do we get these tax reductions? Are we to be told, if the economy is well "fizzed up", as it was this year, "Yes, but the economy is already fully loaded. If there were a reduction in Income Tax it would hasten inflation. Therefore, there can be no reduction in Income Tax when times are good"? I suppose that, equally, next year or the year after, if there were some slack in the economy, if there were some unemployment to be found, if there were a lack of total occupation of resources, as the economists so often cite it, we would then be told that business profits were falling and that the economy could not afford it, the Chancellor could not finance from his revenue, attenuated, as

it would be as a result of a reduction of business profits, a further reduction in the standard rate of Income Tax?
It seems to me that that is what my right hon. Friend the Chancellor of the Exchequer is telling us—

Viscount Hinchingbrooke: Another alternative is that the Government would drastically increase public expenditure to take up the slack of unemployment, and the consequence of that would be another increase in indirect taxation in due course.

Mr. Nabarro: Yes, I am deeply indebted to my noble Friend—he has added a further point to this argument.
What I am trying to do is to demonstrate to the Committee that whatever the economic circumstances of the country a Conservative Chancellor of the Exchequer will, in disingenuous fashion, come to the Committee and say. "We cannot have a reduction in the standard rate of Income Tax this year"—for this, that or the other reason—

The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory): May I ask my hon. Friend whether what he has just said has been borne out by the Budgets of 1958 and 1959?

Mr. Nabarro: In the 1959 Budget my right hon. Friend reduced the standard rate of Income Tax by 9d. In 1955, the standard rate of Income Tax was reduced by 6d. There may be many reasons given for my right hon. Friend's decision last year to reduce the standard rate by 9d. I appreciate the merit of the economic argument that there were resources to be occupied—I agree—but I also appreciate, and my right hon. Friend, as a good politician, would appreciate as well, that it happened to be the eve of a General Election.
The point that I want to make to him is that I do not want to wait for five years more for another reduction in the standard rate of Income Tax. I prefer to have it at a steady rate—and I am glad to see that I carry with me my hon. Friend the Member for Langstone, chairman of the Income Tax Payers' Society—that powerful body. I am carrying a lot of my hon. Friends with me in this.
Let us make no mistake about it. I am quite blunt and honest about this


matter. I have stumped the country for ten years saying that the Socialist Party is the party of high taxes and the Tory Party is the party of low taxes.

Mr. Roy Jenkins: Mr. Roy Jenkins (Birmingham, Stechford) rose—

Mr. Nabarro: May I finish this point before I give way? I do not like the behaviour of my right hon. Friend the Chancellor of the Exchequer in controverting what I said publicly.

Mr. Jenkins: Does the hon. Gentleman think that the best way of reconciling his outlook and that of the Chancellor might be to return to the old Chartist demand for annual Parliaments?

Mr. Nabarro: No. There is a lot to be said for that approach to matters, but there is more to be said, perhaps, for a three-year Budget. I might debate that with the hon. Gentleman at the London School of Economics, or at Oxford, or Cambridge University at any time he wishes. These are all fascinating theories, but let us not take our eyes off the ball this year.
We are proposing to raise £2,485 million this year from the Income Tax. In my view, it is far too much. Every conceivable excuse has been rustled up by the Treasury and by my right hon. Friend the Chancellor for giving no Income Tax relief this year. Powerful Tory Members on my side nod their heads all around me—my right hon. Friend the Member for Monmouth, my hon. Friend the Member for Langstone, though not, of course, my hon. Friend the Member for Birmingham, Yardley (Mr. Cleaver), who thinks that taking anything off taxes leads to rip-roaring inflation. But, then, he comes from Birmingham.

Mr. Leonard Cleaver: Will my hon. Friend be good enough to tell the Committee, if he wants to reduce taxation by so much, which expenditure he will cut out?

Mr. Nabarro: My hon. Friend is a little too naive in these matters. He has evidently neglected to observe that in every year since the end of the war Tory philosophy has dictated that when direct taxes are reduced one provides greater incentives and yields increased production which, in turn, increases the

revenue. That has been Tory philosophy since 1945. I have pronounced it at least fifty times in the City of Birmingham, several times in my hon. Friend's constituency, and I have never been contradicted by anybody there until his arrival in the House.

Mr. Mitchison: On a point of order, Mr. Arbuthnot. Am I compelled to look at the right ear of the hon. Member for Kidderminster all the time? I should see the whole of the right side of his face if he addressed the Chair instead of addressing one of his hon. Friends behind him.

The Temporary Chairman (Mr. John Arbuthnot): The hon. Member should address the Chair.

Mr. Nabarro: I am sorry that my stridency has wakened the hon. and learned Member for Kettering (Mr. Mitchison) from his slumbers. Moreover, I have not been talking about the local rates. I have been talking about the Income Tax.
My hon. Friend the Member for Yardley is, of course, a distinguished chartered accountant in Birmingham. It is clear that he does not share my philosophy about the Income Tax. I am sorry that he does not. The majority of the Conservative Party does. I do not spend my time advocating, before General Elections, reductions in direct taxation and then come to the House and support an opposite policy.

Mr. Kenneth Lewis: Some of us go a certain way with my hon. Friend, but he does not help his case when he exaggerates. He has already said, of course, that he believes in the social programme of this Government—

The Temporary Chairman: Order. We are on Clause 13, which deals with the Income Tax.

Mr. Lewis: If I am out of order, Mr. Arbuthnot, my hon. Friend was out of order before me, since he raised it. I am simply drawing attention to what my hon. Friend—

4.45 p.m.

The Temporary Chairman: The hon. Member must not put himself out of order, whatever else may have happened.

Mr. Lewis: I will try to keep myself in order. If one looks at the pre-war period in this country, one sees that Income Tax was extremely low. My hon. Friend will surely agree that in those days we had very large-scale unemployment. This cuts across his argument somewhat. What one must try to do is to achieve a balance. I agree that a case can be made out for reducing certain Government expenditure and reducing taxation, but to say that one must go on and on reducing both Government expenditure and the rate of Income Tax would mean that the whole philosophy on which we won the last General Election would be down the drain.

Mr. Nabarro: I should speak for an interminably long time if I replied to a general proposition of that kind. I think that I have dealt with most of the matters in that intervention.
The effects of continuing excessive taxation are, of course, wholly injurious. The excessive taxation I refer to in this context is 7s. 9d. in the £ as a standard rate of Income Tax. A large and highly complicated part of this Finance Bill deals with tax evasion and tax avoidance. Excessive taxation also leads to the publication of such documents as How to Pay Less Tax, by Mr. Alexander Thomson of the Evening Standard, in which one finds passages dealing with the "The Family Man" and "The Businessman". As the Committee knows, the family man pays Income Tax and the businessman pays Income Tax. There is a heading "The Seven-year Gift", and a whole host of other associated matters.
Most tax evasion springs from an excessive level of direct taxation. [HON. MEMBERS: "Hear, hear."] Most of my hon. Friends agree with that.

The Temporary Chairman: The hon. Member should address the Chair.

Mr. Nabarro: Yes, Mr. Arbuthnot, but occasionally I have to turn over my left shoulder. I shall not do it more often than is necessary.
Most of my hon. Friends agree with me, of course, but there are certain professional people who have an interest in taxation complexities. I believe that simplicity of taxation is a virtue, and that is one reason why I have complained

about 7s. 9d. in the £ as the standard rate. It is not simple. It is unnecessarily complex. It ought to be 7s. 6d. in the £

Mr. Paul Williams: This year.

Mr. Nabarro: Yes, this year.
I hope, therefore, that the majority of my hon. Friends will agree with me in principle today that it should be a strong criticism of this Finance Bill that we are maintaining the standard rate of Income Tax at 7s. 9d. instead of endeavouring to reduce it. The second point is that I do not expect to wait for five years before the standard rate of Income Tax is reduced again. The third and powerful point is that, so long as we maintain direct taxation in this country at these excessive and exorbitant levels so will this wretched incubus of tax evasion and avoidance continue to grow. The Parliamentary result, of course, is that we have 73-Clause Finance Bills, and attendant Schedules, such as the present one, a large part of which is devoted to trying to plug up the holes of tax evasion.
I shall not vote against this Clause. [HON. MEMBERS: "Oh."] The hon. Member for Gloucestershire, West (Mr. Loughlin) who immediately starts chortling, after having been in the House of Commons, possibly, for only five months, has not yet realised that it is almost impossible for any Member of the Committee to vote against the standard annual Clause raising the Income Tax. [HON. MEMBERS: "Why?"] Because Income Tax is, in present circumstances—I am not affiliated with Mr. Khrushchev, who wants its abolition—still necessary. My case is that it is too high and that it ought to be 7s. 6d., not 7s. 9d. But that does not mean that I can vote against the whole Clause which raises the Income Tax. It was the Chairman who decided not to call my Amendment to reduce the standard rate, by just 3d.

Mr. Charles Loughlin: This is not the first time that the hon. Member for Kidderminster (Mr. Nabarro) has spent a considerable time in castigating the Government and has then run away from the Division Lobby.

Mr. Nabarro: Really, the hon. Gentleman is puerile in his interruptions. Only


yesterday I had to lead the whole of his party into the Lobby, against the Tobacco Duty.
I will not vote against the Clause standing part. My Amendment to reduce the standard rate from 7s. 9d. to 7s. 6d. has not been called, but I give the Chancellor and his successor fair warning. I will not give up my campaign to secure a reduction of Income Tax. The trouble with my right hon. Friend's Budget this year is that it has increased taxes when it ought to have reduced them. He represented to the nation that he has increased taxation by only £70 million, whereas the increase in taxation was many times that amount, including £242 million more revenue from Income Tax and—I hope that this will strike a chord in the mind of the hon. and learned Member for Kettering —a further increase in the form of local rates.
For all these reasons, I hope that the Financial Secretary, when he replies, will pay some attention to that not inconsiderable section of his party which believes passionately that Income Tax is far too high and should be reduced at the earliest date.

Mr. Diamond: Up to a point, I share the view expressed by the hon. Member for Kidderminster (Mr. Nabarro) that the rate of tax is too high and should be reduced, but he only touched at the end of his remarks on the manner in which it ought to be reduced. Earlier it seemed to me that what he was getting at was a reduction in expenditure in social and other services and was trying to pretend that merely by a reduction in Income Tax there would be such an increase in activity that it would make up for the tax lost. I would not accept that, but I share his view that we should endeavour to be much more straightforward and simple about our tax affairs. We should try to turn over a new leaf and collect the same amount of revenue by the simple process of reducing the effective rate of tax and making everybody who should pay do so.
I refer to the effective rate, not the standard rate. I draw a marked distinction between the two things. The hon. Member for Kidderminster was quite right when he said that the taxpayer who pays under P.A.Y.E., by and

large, pays where it hurts most. He went on to say that there are about 18 million taxpayers, the majority of whom no doubt pay tax under Schedule E. It is wholly wrong to say that by Parliament fixing different standard rates and different allowances the difficulty is entirely overcome, because those who pay an apparently high rate of tax on high incomes avoid tax whereas those in the lower income groups have no opportunities of availing themselves of tax avoidance schemes and have to pay a rate which is, in effect, disproportionately great. This Finance Bill attempts to alter that in some way, but it does not go far enough.
In discussing this Clause, which refers both to raising Income Tax and to the rate of Income Tax, I want to suggest two things that we ought to do. First, I suggest that the definition of "income" should be altered. Naturally, I am most anxious to keep myself in order. Therefore, I refer to the fact that the first words of the Clause are "Income tax". It goes on to refer to the rate of Income Tax. I think that the present definition of "income" is much too narrow. All money that is available to spend should be regarded as income. Some have large sum arising from a variety of ways, frequently called capital gains, but this is merely words. It is money available for spending. It is the excess over what an article cost against what it realised. It is wholly free of tax, whereas a certain section, not necessarily small in everybody's case, of what is available for spending is fully taxed in other people's cases.
This is wholly wrong and gives rise to social tensions and feelings that certain classes have marked unfair advantages over others. I am sure that if the Chancellor were prepared to widen the interpretation of " income" considerably so as to include all money available for spending, he would be able to reduce the rate of tax markedly without prejudicing the amount of revenue available.

Mr. John Hall: The hon. Member is advancing a very interesting theory. I wonder whether he would like to give a few practical examples. In saying that all income available should be taxable, does he mean that all capital that might be gained in a given year should be


subject to tax? Does he mean that winnings in a game of chance, such as the football pools, should be subject to tax? What exactly does he mean?

Mr. Diamond: I am sure that you, Mr. Arbuthnot, would not wish me to go into great detail on the question of a capital gains tax, but what I am saying is that there should be a widening of the interpretation of "income" in order to include all money available for spending. Realisation of capital would not be included. The excess of the realisation of capital over the cost would be regarded as money available for spending, because the person's capital would be unaffected. A person would start in a certain period with a certain capital and any excess realised would be regarded as income. The original capital would not be affected. The amount available for taxation would be enormously increased, the rate would be reduced and the temptation of tax avoidance would be enormously reduced. The encouragement to divert attention from tax avoidance schemes to constructive work would be increased and social tensions would be avoided. I would have thought that the Chancellor ought to consider altering the whole of our attitude on this matter so that we can be rid for all time of this series of debates year after year in which we have to try to plug loopholes and deal with the problem of the high rate of tax.

Mr. Stanley R. McMaster: Does the hon. Member suggest that an allowance should be made on the realisation of capital? If so, does he appreciate that capital losses often exceed capital gains?

The Temporary Chairman: We cannot debate the matter of capital losses on this Clause.

Mr. Diamond: I naturally accept what you say, Mr. Arbuthnot—

Mr. John Hall: Further to your Ruling, Mr. Arbuthnot. Would it not be in order to refer to the question of capital losses? Capital gains have been used as an example of income by the hon. Member for Gloucester (Mr. Diamond). He has said that that should be treated as income, which was the point referred to by my hon. Friend the Member for Belfast, East (Mr. McMaster).

Mr. Diamond: I referred to capita! gains being available for spending and, therefore, there should be a much wider interpretation of the word "income". Capital losses would be set off against capital gains. It is all very simple, but there is not time to discuss the matter in great detail.
What I want to put before the Chancellor is a new approach for a much reduced effective rate with people paying the effective rate of tax on the money available for spending that Parliament intends they should pay when we pass Finance Bills. If we could stop tax avoidance we should go an enormous way to bringing about a much better feeling on and approach to these matters generally and towards collecting greater revenue.

Mr. P. Williams: Mr. P. Williams rose—

Mr. Diamond: It would be helpful if I could say ten consecutive sentences without interruption.

Mr. Williams: I appreciate that, but surely it is important to get to the root of the argument straight away without interjecting half-way through. Surely we should go to the seat of the trouble and remove the cause for tax avoidance, which is too high a level of taxation.

5.0 p.m.

Mr. Diamond: The hon. Member's intervention shows that perhaps he realises what I am saying. I am saying that it would be a good thing to reduce the effective rate of tax so as to reduce and, if possible, extinguish the desire to avoid tax. It is not worth while avoiding tax, which is a costly business, unless there is a good deal to be avoided.
The Chancellor has told us that a great deal is avoided. He told us that on one form of tax avoidance alone the loss is running into many tens of millions. That is without having regard to all the others which have not yet come to the notice of the Chancellor. I think that we should be on very sound ground in trying to reorganise our approach to Income Tax so that people would not be encouraged the whole time to look for methods of tax avoidance.
There is also the question of tax evasion. I had not thought that this was a problem which would need to take up much of the time of the Committee. I


thought that the Treasury and Inland Revenue had sufficient powers, but I am obviously quite ignorant on these matters. Some of the latest figures have shown that that is far from being the case. We are told by the Inland Revenue that of one and half million people self-employed in small businesses, one-third —that is, 500,000—show by their assessed tax figures that they earn less than £250 a year; that is, 500,000 active, enterprising, self-employed people earning less than £250 a year, less than £5 a week. Another 500,000 earn on average £300 a year. One million people earn these fantastically low figures according to the Inland Revenue report. It is, therefore, not surprising that a letter should have been written to the Financial Times by an official of the Inland Revenue Staff Federation saying:
Is it really the case that nearly one million go-ahead, self-employed people remain satisfied every year with less than a railway porter or an agricultural worker can earn?

Mr. John McKay: When my hon. Friend says that the self-employed on average earn only £200 a year, is it not the case that self-employed people put to cost account wages for themselves in addition to the £200?

Mr. Diamond: It is not the case. I am glad that my hon. Friend raised that point. He is referring to the case of a number of corporate bodies where the profits are extremely low because the profits charged against the profits of a limited company include the salary of the managing director. I am referring to the self-employed person where no such charge would be appropriate or allowed. Here the true net income of these individuals, 500,000 of them, is less than £250 a year, and another 500,000 have an average income of £300 a year. Do they complain? Not likely. They go on doing this year after year. The total number involved has continued for many years as is well known to the Inland Revenue, the Treasury and the Chancellor. Surely no one would suggest that these enterprising individuals are happily satisfied to go on earning these derisory figures. They are naturally satisfied to go on paying tax based on these derisory figures, and it is right that this should be brought to the atten-

tion of the Committee, so that it can realise the enormous extent of tax evasion. The total yield of Surtax is very considerably less than it ought to be when one looks at the total figures of taxable income.
Another way by which we could reduce the standard rate of tax while collecting the same amount of revenue and supporting the same social services is by collecting the Estate Duty which should be payable. What dead man would object to the paying of Estate Duty?

The Temporary Chairman: The hon. Gentleman is going a little wide of the Clause we are discussing.

Mr. Diamond: My anxiety would be not to do that at all. I am entirely in your hands, Mr. Arbuthnot. I would suggest to you that the argument I am trying to put before the Committee is that the standard rate of Income Tax, which we are discussing and which is the essence of this Clause—indeed, the Clause is about nothing else—should be and ought to be different if various methods open to the Treasury were adopted by the Treasury to reduce the effective rate of tax.
In a few sentences only, I remind the Committee, in contradistinction to what the hon. Member for Kidderminster said about Income Tax and the amount of Income Tax being collected increasing year after year, that Estate Duty has remained constant for the last ten years although the national income has doubled during that period. The basis of the national income is to a certain extent securities which must have gone up in value. We know that all equities quoted on the London Stock Exchange went up by 51 per cent. last year alone, and yet Estate Duty, which would provide the method of reducing the standard rate of tax, remained constant.

Mr. John Hall: Is the hon. Gentleman not aware that the yield in real terms from an estate which may have been worth £10,000 pre-war is far less in real terms at the present rate of progressive taxation than the yield to the legatees on that same estate before the war?

Mr. Diamond: I cannot accept that without going into the figures in detail. I am stating the fact that Estate Duty


collections have fallen over the last ten years while the national income has doubled during that period, and that during last year alone capital in terms of equity values quoted on the London Stock Exchange increased by 51 per cent. If the conclusion from that is not that Estate Duty is being increasingly avoided, as we all know it is, then I am a Dutchman.

Mr. Nabarro: What the hon. Gentleman has left out of his calculations in referring to Estate Duty is the fact that doctors keep us alive so much longer. That is the answer.

The Temporary Chairman: I do not think that arises under this Clause.

Mr. Diamond: Finally, I suggest to the Chancellor that another way of making it possible to reduce the standard rate of Income Tax would be for him to turn his attention to the major methods of dodging taxes which are still open. I do not refer to the switching of income into capital, which will be discussed later. I refer to the method of assessing tax on businesses under Schedule D. As we all know, this has always been collected on the basis of the income of the previous year, which gives an opportunity for a great deal of adjustment and manœuvring with the taxpayer's money. If the Treasury would consider turning Schedule D, which is a tax payable on businesses, into a pay-as-you-earn tax, in the same way as Schedule E, so that businesses were assessed on the income of the year and not on the income of the previous year, not only would many loopholes of tax avoidance be stopped up, but the tax would be brought into relation with the period when the income was earned, which would serve the national interest very well.
This proposal would not mean more work. This matter has been discussed and was before the Royal Commission on the Taxation of Profits and Income, which made a recommendation about it. I do not know of a single argument or responsible body of opinion against it. I only know that, as in all other things, the Treasury is lagging years and years behind. The Treasury never does anything unless it is too late and always on too small a scale. Nevertheless, I

hope that the Treasury would give sympathetic consideration to the suggestions I have made so that we can much reduce the effective rate of tax without for one second decreasing the revenue being collected and the social services which it serves.

Mr. William Shepherd: I will not try to get out of order by following the hon. Member for Gloucester (Mr. Diamond) into all the arguments which he endeavoured to make.
I think there is some reluctance on the part of hon. Members opposite and, I may say in all due modesty, among hon. Members on this side of the Committee to face up to some of the realities of the present situation. I have no doubt that by redefinition of income and by chasing the avoiders and by other methods we can bring about some improvement in the revenue.
I wonder whether the hon. Members appreciate the realities of the position of Great Britain in 1960 in the world as we know it. It would be very simple, if we were a country like Belgium, to have a very low rate of Income Tax. If we had no commitments to the Commonwealth in terms of capital, if we had no demand for a large and ever-increasing defence expenditure, if we were not the leaders in social progress, if we had not a great deal to make good from the war, we could have a much lower rate of Income Tax than now exists.
However, I hope no hon. Member will propose that Great Britain should endeavour to be a great nation on the cheap. The United States of America tried that for quite a time and the result was a second world war of great magnitude. I urge my hon. Friends and hon. Members opposite to try to face up to the realities which confront the country.
In terms of world size, we are no longer a great industrial nation. Despite our lack of size and the resources of other countries, we are endeavouring to "keep up with the Joneses". In some respects, of course, we have been ill advised to do so, but we cannot reduce Income Tax unless we are prepared to make serious inroads into many aspects of our national life which, on reflection, most hon. Members would regard as supremely important.
Having said that, I have no masochistic desire to see Income Tax any higher than it need be. Obviously, I would like to see it down to 2s. in the £, or even to what it was when it first started.

Mr. John Rankin: Or down to nothing.

Mr. Shepherd: Or even down to nothing, as the hon. Member said.

Mr. Rankin: Like the Chinese.

Mr. Shepherd: However, I am not happy about some of the tendencies with Income Tax in the last ten years. There has been far too great a tendency for too much of the tax load to be borne by Income Tax and not in other directions. In 1948, direct taxation represented 45·6 per cent. of the total tax raised and in 1959 that figure had risen to 50·7 per cent. Indirect taxation was 48·3 per cent. of the total in 1948 and last year was down to 45·4 per cent. There is a strong case for reversing that tendency.
I am not prepared to risk your disapproval, Mr. Arbuthnot, by dealing with spending taxes, but I say without hesitation that the existing situation, in which proportionately more is raised by direct and proportionately less by indirect taxation, is wholly unsatisfactory and that steps should be taken to reverse it.
5.15 p.m.
Hon. Members have said that Income Tax is too high, and I agree with them, but it is not as high compared with other countries as some hon. Members have made out. Roughly 30 per cent. of the gross national product at factor cost is taken in this country in the form of tax, both local and national. In the United States, the figure is 25 per cent.; in Western Germany, 28 per cent.; and in France, 28 per cent. In France and Western Germany there is little difference between the percentages of the gross national product at factor cost which is taken by taxes, both direct and indirect, but there is a significant difference between Western Germany and this country and between France and this country in the proportions taken by direct and indirect taxation.
In Western Germany, for example, only 11 per cent. out of that 28 per cent. is taken by direct and the remaining 17 per cent. by indirect taxation. In France, the corresponding figures are 8 per cent.

and 20 per cent. In this country, about 14 per cent. is raised by direct taxation and only about 15 per cent. by indirect taxation. Compared with the pattern of countries with economic set-ups similar to our own, the amount which this country derives from direct taxation is too high. We can get a reduction in the standard rate of Income Tax by shifting the growing emphasis from more direct taxation to more indirect taxation.
I regard the present level of Income Tax as oppressive, and I recognise that it is discouraging to many people, not only to people who are earning a great deal of money. I thought my hon. Friend the Member for Kidderminster (Mr. Nabarro) was wrong when he spoke of increasing the area over which Income Tax was paid. We have a tremendous number of Income Tax payers in this country.

Mr. Nabarro: I am sure my hon. Friend would not wish to misinterpret what I said. I said that there were 18 million Income Tax payers, which was five times the number pre-war, and that, in contradistinction to the hon. and learned Member for Kettering (Mr. Mitchison), I supported the net being cast as wide as that, but I did not say that I wished to increase it.

Hon. Members: You did.

Mr. Shepherd: My hon. Friend's recollection of his words and mine are at some variance. I am pointing out that in practical terms it is not possible to extend the area over which Income Tax is drawn. We already have 18 million or 19 million Income Tax payers, which is a very large number.
I am often surprised when I look at wage packets to see how large an amount a man, particularly a single man with a relatively modest salary, has to pay in Income Tax. It is almost frightening to see these figures written on the outside of wage packets. Therefore, I think there is an urgent need to reduce the level of Income Tax, and it seems to me that there are two ways in which that can be tackled in the future.
Obviously, we cannot reduce certain types of expenditure, but we can, in order of expenditure from below the line and to reduce Income Tax, take some forms have them financed in some other way.


I will not go into detail, but it is obvious that the financing of the nationalised industries and of the Health Service would, if it could be transformed in some other way, make a dramatic contribution towards Income Tax reduction.

Mr. A. C. Manuel: In what way?

Mr. Shepherd: I am not able to develop the matter at this stage, but perhaps later on we can say something about these things. I am not able at this stage to develop the precise directions in which this might go. What I am saying is that if there is to be, in the position in which we find ourselves, any dramatic reduction in Income Tax in the light of the increasing demands made in many directions, one of the most pregnant ways of doing it is by changing the method by which the nationalised industries have their finance provided and by having some other form of financing the Health Service.
I have made these observations with some little difficulty owing to the fact that I have had to skate very near to the bounds of order. I will repeat the note on which I started. It is that we cannot expect to be a great nation on the cheap. I as an Income Tax payer do not want to pay any more tax than I am forced to pay, but, on the other hand, I would not be prepared to have a lowering of our social standards, of the prestige of this country overseas or of the position of Britain as the head of the Commonwealth just for the sake of getting a mere reduction in Income Tax.

Mr. Donald Chapman: I would want to think a good deal about what the hon. Member for Cheadle (Mr. Shepherd) has been saying. I should have thought that he ought to weigh in the balance the fact that standards of living and incomes have risen by 20 per cent. in the last ten years and that if there is a very small increased proportion taken by direct tax it is out of a very much better personal income. I am not sure that we always take that factor into account. Is a 3 per cent. or a 5 per cent. increase really as significant as the hon. Gentleman made out?
I wish to refer to what the hon. Member for Kidderminster (Mr. Nabarro) said, because one thing that disquiets me

about the series of speeches which the has been making throughout the discussions on this Bill is the impact that it is having outside. I do not know whether it is that the newspapers are protecting a Conservative Administration from 'the kind of attacks being made here, but I am certain that if a back bench hon. Member on this side of the Committee made the sort of attack on his leadership that is being made at every stage by the hon. Member for Kidderminster the newspapers would be full of it and would be saying that the Socialist Party, or whichever party it was other than the Tory Party, was in danger of falling in ruins.

Mr. W. R. Rees-Davies: Mr. W. R. Rees-Davies (Isle of Thanet) rose—

Mr. Chapman: I cannot give way to the hon. Gentleman just now, but I will do so a little later. As he knows, I do not usually refuse to give way.
When we think of the widespread attack the hon. Member for Kidderminster has been making on his right hon. Friend the Chancellor, it is remarkable that it is not being recorded outside. If the hon. Gentleman could have seen the face of the Chancellor of the Exchequer when he was making some of his remarks about him and casting very strong suspicions on his probity for making tax concessions before a General Election, I think he would have considered a little more carefully before making that sort of attack on his own Front Bench. I would hope that we on these benches have a little more loyalty than has the hon. Member for Kidderminster in circumstances such as that. I do not know of any hon. Members on this side of the Committee who would accuse their right hon. Friends of doing things like that before a General Election, but that is what was done by the hon. Member for Kidderminster today.

Sir Alexander Spearman: I think the hon. Gentleman is perhaps exaggerating the seriousness and importance attributed to the views expressed by the hon. Member for Kidderminster (Mr. Nabarro).

Mr. Chapman: Of course, that is an alternative explanation. I suppose, firstly, that there is the fact that the Government are protected by the Conservative newspapers from the attacks of the hon. Member for Kidderminster and,


secondly, that these attacks have now reached such a pitch of buffoonery that they are not being as seriously regarded as they might otherwise be.

Mr. Nabarro: I intervene in the speech of the hon. Member for Birmingham Northfield (Mr. Chapman) to contradict the point which he makes. I read all the popular newspapers this morning and most of them carried reports in their columns of my speeches yesterday. I thought that I was very adequately reported.

Mr. Chapman: Of course the hon. Gentleman is adequately reported.

The Temporary Chairman: I would remind the hon. Member that we are on Clause 13, which deals with the rate of Income Tax.

Mr. Chapman: I am just expressing surprise once again that we can have a forty-minute speech of that kind by the hon. Member for Kidderminster and yet tomorrow morning's newspapers, I will almost guarantee, will hardly contain any significant comment upon it.

Mr. Nabarro: I will send the hon. Gentleman a copy of the Daily Express tomorrow.

Mr. Chapman: I want to go a little wider into what the hon. Gentleman is saying. On the whole, I think that the gap between the two parties on the question of reductions in the standard rate has narrowed significantly. It would be very easy for me to jump on to the same bandwagon as the hon. Member because we both come from an area of the country which is showing remarkable prosperity.
I would put it quite simply. In my constituency we now see the youngsters who come to play football on a piece of waste land arriving in motor cars. The girls who come along to watch are dressed in a way that would not disgrace the Paris fashions. It is very tastefully done, too. There has been a remarkable change in a period of fifteen years. It is no use the hon. Member for Ilford, South (Mr. Cooper) grinning. I accept these things. The obvious thing is that, in those circumstances, it is very easy to jump on the bandwagon, especially as these young people are so new to prosperity, and say that we should reduce the standard rate because this will buy

votes very easily indeed at this stage. The number of people who pay Income Tax has gone up from 15 million to 18 million, and it is now probably 19 million, and that in less than ten years.

Mr. A. E. Cooper: It does not easily buy votes.

Mr. Chapman: It does—

Mr. Cooper: During the last election the Leader of the Opposition and other hon. Members oposite came forward with three deliberate cash bribes to the electorate, and they were rejected out of hand.

Mr. Chapman: That is a rather different point. I do not want to argue it now, because I would be out of order. It was a question of whether the electors thought that we could afford these things. I think that they were wrong.
The whole emphasis on the lowering of Income Tax has a great appeal to young people in their late teens and early twenties who are, as the hon. Member for Cheadle says, receiving fat pay packets and paying a good deal of Income Tax by way of P.A.Y.E. As I say, it would be very easy to jump on that bandwagon. But we must not always act from the most selfish individual motives. I want Income Tax and the standard rate to be reduced, but I would say to the hon. Member that there are more important priorities than that. That is the point which ought to be made to him all the time—that this must be kept in proportion.
5.30 p.m.
For example, there is the whole question of old age, which has been debated at length and into which I will not go now, and of the number of people who are in deprivation in the later years of their lives. There are many cases of lack of resources in the event of extended sickness and infirmity and many cases of difficulty in widowhood. There is the whole question of the family man. My hon. and learned Friend the Member for Kettering (Mr. Mitchison) was right in saying that before we consider reducing the standard rate we ought, after all these years of advances in the national income, to increase the children's allowances, which have barely risen to keep pace with the cost of living over the last ten years.
I would point out to the hon. Member for Kidderminster that some of us, in constituencies such as I represent and in days of increasing prosperity, could very easily play to the gallery and say that our constituents would welcome the easy reduction in the standard rate of which he is talking. But some of us are not prepared to go so far so easily without first asking whether there are not other priorities to be attended to. I think that the hon. Member does a disservice if all the time he asks the nation to take the most selfish point of view in these matters.
I hope that sometimes he will reflect that, although there is increased prosperity, there are still a number of people at the very bottom of the scale who ought to have priority before the standard rate of Income Tax is reduced. The family man, although not always in immediate difficulty, nevertheless ought to have a greater priority than the single man who is paying the standard rate. I am surprised that there has been no defence of this kind from the more progressive on the Conservative benches. I shall be surprised if they all simply support the proposition that the first priority is a reduction in the standard rate.
By the next election this gap between the two parties will probably have narrowed even more. At the moment, 18 million to 19 million people pay the standard rate, and I think that the figure will rise to the 20 million mark quite quickly with the present advances in the standard of living.
Having said that about the Conservative Party, I hope that my own party, too, will take careful note that we must beware, in the years of prosperity and advanced standards of living, of being labelled as the party of high direct taxation. It certainly does not serve to be on that proposition in areas like the prosperous Midlands today. Like the Conservative Party, we must temper decisions about reductions in the standard rate with regard for the needs of those who are less fortunate than most of us —those at the very bottom of the scale. I know that the emphasis will end differently on the Conservative side of the Committee from that on this side of the Committee, but I think that we ought to

look into the middle of the 1960s and say bluntly that we, too, will be increasingly a party of lower taxation—it is quite right that it should be so—while taking care of the most deprived in our community.

Mr. P. Williams: The whole Committee will probably agree with the last phrase of the hon. Member for Birmingham, Northfield (Mr. Chapman), for it is vitally important for the continuing prosperity of the country that, if possible, we should all aim at controlling Government expenditure and, consequently, being able to influence the Government to reduce the level of taxation throughout the whole range.
I have three short reasons for entering the debate. First, I think that the content of the Clause is bad because it maintains the standard rate at an inequitable and clumsy level. As my hon. Friend the Member for Kidderminster (Mr. Nabarro) said, there could be no more ridiculous figure, other than the halfpennies and farthings we were discussing yesterday, than the figure of 7s. 9d. It is a great regret to me that the Amendment on the Order Paper seeking to reduce the standard rate by 3d. has not been called. I think that this year it would have been a perfectly reasonable operation to rectify the slight miscalculation of last year. The 9d. was a ridiculous figure to take. It would have been much more sensible either to have gone for 6d. last year or preferably for 1s., but if that were not possible, it should have been possible to put it right this year by a corresponding adjustment to reduce the standard rate either by 3d. or, preferably, by another 9d.
My second reason for disliking the Clause is that it appears to continue the basic philosophy of a high-tax economy. It seems to me that unless we can get away from this assumption that we are committed inevitably and inexorably to a high-tax economy, we shall never release the latent energies of our country and of many people. One may be able to do it in cricket but I do not think that one can always hit one's way out of a non-existent danger. Similarly, I do not believe that one can high-tax one's way out of trouble. I believe that at this stage it would have been quite reasonable to make small but significant reductions in taxation. I oppose the basic


philosophy behind the maintenance of the standard rate at 7s. 9d., the basic philosophy appearing to be that we should maintain and continue to maintain a high-tax economy.

Mr. Manuel: I am very interested in the hon. Member's argument that if there is a high rate of Income Tax we shall not release the latent energies of the people. Does he not agree that if there is not a fairly high rate of public expenditure we shall not release many of the latent talents that exist? For example, if full education grants were not given to low wage earners for the education of their children, many talents would not be discovered in the higher reaches of education. Would he scrap that in order to have a lower rate of Income Tax?

Mr. Williams: I remind the hon. Member that one of the fundamental failures of the Socialist Government between 1945 and 1951 was that they believed in a high-tax economy and appeared to believe in trying to hit their way out of trouble. All they did was to hit the country into near bankruptcy.

Mr. Manuel: Answer the question.

Mr. Williams: I suggest to the hon. Member that all the initiative and new sources of creative ideas do not necessarily come from the Government. I do not accept the doctrine that the Government are inevitably right. Many new initiatives and new industries can come from releasing the energies and abilities of a free enterprise society. For this, among other reasons, I oppose this philisophy of high-tax economy.

Mr. Mitchison: Does the hon. Member disapprove of the National Health Service and all the other social services which were introduced directly after the war as a result of a measure of high taxation? Would he prefer the ghastly muddle there was after the 1914–18 war?

Mr. Williams: I do not understand how the hon. and learned Member managed to get that sentiment out of the remarks I was making unless he was asleep, as he appeared to be asleep.

Mr. Mitchison: The hon. Member is quite mistaken in supposing that I was not listening, in full possession of my faculties, to every word he was saying.

Mr. Williams: I am grateful for the hon. and learned Member's attention. My third reason—

Mr. Manuel: Answer the question

Mr. Williams: My third reason for opposing the attitude of this Clause is similar to that given by my hon. Friend the Member for Cheadle (Mr. Shepherd).
If one has to make the assumption that in any year a certain level of revenue is essential, we ought now to be altering the balance between direct and indirect taxation. My hon. Friend gave certain figures on this matter. I agree with him that we ought now to be devoting our minds rather more to lowering taxation on income and, if it is essential —although, I suspect, it is not—to raise by a corresponding amount the taxation on spending. This seems a much more equitable and fair way as between individuals, in the first part, and a much more sensible way of stimulating the economy, in the second part. In line with all this, our objective now should be not only to conserve but to create new wealth. I do not believe that the Clause. unamended, helps.

Mr. Rankin: From the hon. Member for Cheadle (Mr. Shepherd) and the hon. Member for Sunderland, South (Mr. P. Williams) we have had revealed one of the basic reasons for today's debate. I am not sure whether the hon. Member for Kidderminster (Mr. Nabarro) is directly identified with their attitude, but certainly his Amendment, which was not called, has sparked off the basic cause for the debate. I refer to the widespread attitude within the Tory Party that there should be a change in the incidence of direct taxation and of indirect taxation.
The hon. Member for Kidderminster referred to the fact that the amount yielded by direct taxation in this year's Budget was £2,485 million, but the hon. Member failed to say that the amount yielded in the Budget from indirect taxation—that is the taxation on expenditure —to which the hon. Member for Sunderland, South referred, was £2,777 million.

Mr. Jay: May I assure my hon. Friend that his figure of £2,485 million is not all direct taxation but is the Income Tax alone?

Mr. Rankin: I had the hon. Member's speech in mind when I used that phrase. We are talking about a reduction in the standard rate of Income Tax. Already, therefore, there is a serious gap between those two forms of taxation, a gap approaching £300 million. That is the gap which the hon. Member for Sunderland, South proposes to widen.
By increasing that gap, whether he confesses to it or not, the hon. Member is seeking to impose a still greater burden upon the working class in favour of those who are better placed. Indirect taxation affects working men and women far more than the well-to-do, whose incomes can allow them to face these charges which, particularly in the case of children's clothing and other items, press heavily upon the incomes of ordinary people. Obviously, this is a direct political move to secure the personal advantage of the class which hon. Members opposite largely represent in the House of Commons.

Mr. P. Williams: I am interested in the hon. Member's argument. He represents the same sort of area in Scotland as I represent in England and he knows perfectly well that he is talking a lot of tomfoolery.

5.45 p.m.

Mr. Rankin: The hon. Member does not do it so well.
Let me give an example. In the House of Commons, the non. Member and I repeatedly have pressed the Government for more help to shipbuilding and to shipping. Last year, the industry got it from the Government in the shape of 40 per cent. investment allowance. Did that concession go to improving the industry which the hon. Member and I have the privilege of speaking for and supporting in the House? The Times of 28th March tells us that the Cunard surplus for the past year was £900,000.

The Deputy-Chairman (Major Sir William Anstruther-Gray): I am reluctant to interrupt, but we are debating the rate of Income Tax.

Mr. Rankin: I quite agree, Sir William. I always thought that it was permissible to give an example in reply to an interjection. The hon. Member has accused me of bias, and I am giving

him an example to show that I am not biased but am stating the fact.
Those investment allowances were granted by the Government and were increased to 40 per cent. This year, the Cunard Company has declared a surplus of £900,000. Of that surplus, £565,000 was directly due to those increased investment allowances. It was used, not to help the workers, but to help the profiteers and the dividend hunters by increasing the dividend to 10·2 per cent. instead of paying the 3·2 per cent. which otherwise would have been earned.
In their attitude today, in seeking to shift the balance from direct taxation to indirect taxation and to make the disbalance bigger even than it is, hon. Members opposite are speaking not for the nation as a whole, but for a class. The party opposite is a class party, as its members have shown time and time again.
The argument can be carried a little further. From the income that he gets, the Chancellor of the Exchequer must maintain the social services, to which the hon. Member for Kidderminster referred. Seven hundred million pounds are required for the Health Service and over £700 million for education. The Chancellor has not only to maintain these services, but to increase them, particularly education. To do this, he must get an income. That income comes chiefly from direct taxation, £2,485 million, from indirect taxation, £2,777 million, and from tax on capital, £213 million. Why is there this appalling gap? My hon. Friend the Member for Gloucester (Mr. Diamond) has referred to this exceptionally small yield of national income from taxation on capital, amounting to only £213 million. Is there no thought that we might pursue the many ways that are open to increase that part of our national income and, therefore, perhaps, reduce Income Tax? The hon. Member for Kidderminster never suggested that, nor did he say—

Mr. Nabarro: I tried hard not to have the former occupant of the Chair call me to order. I kept in order throughout. If the hon. Member tempted me into those lush pastures, I should be out of order at once.

Mr. Rankin: There are many means of escape. The hon. Member's language is often so exhilarating and exotic that


he confuses his own argument along with his audience.
That is a source of increasing the budgetary income, and the Chancellor has faced it in one of the most remarkable Budgets ever produced during my time as a Member of the House of Commons. It is a Budget that admits to the existence in this country of a criminal class which is pursued in order that it may be brought to judgment by a Tory Government. It is the "strippers" and the "washers" who are defrauding the country now of £100 million per year.

The Deputy-Chairman: Whatever "strippers" and "washers" may be, they have nothing to do with Clause 13, which we are now discussing.

Mr. Rankin: It is surely within my province, when the Chancellor's sources of income are being attacked by the hon. Member for Kidderminster, to suggest to the Chancellor where he could recoup himself to the extent of £100 million today by getting after this criminal class which occupies such a large part of the Budget. I hope that hon. Members on the other side of the Committee will realise that if it had not been for these people this Finance Bill would have been about half its present size. And the Financial Secretary is out for that £100 million. I hope that he will verify that figure as the stake when he replies.
I do not wish to see indirect taxation going any higher. If I had the option of choosing between increasing indirect taxation and increasing direct taxation, I would go for an increase in direct taxation. I do not want to see that. I think that it can be avoided if all those who dodge and evade taxes today can be made to cease their anti-social behaviour. I am sure that many hon. Members opposite, particularly the rebels, will agree with me in that.
I should have liked to have spoken long on this topic, but it is the desire of both sides that we should draw this debate to a conclusion. But not only is there this attempt to upset and exaggerate what already is an unfair disbalance between indirect and direct taxation; there is also a challenge to the general standard of living of the people. We

continually hear claims from the party opposite that they have reduced the cost of living. I am certainly not against reducing it. But this Committee has to be careful in coming casually to decisions of that type, because first of all we have to show clearly that we can reduce the cost of living without attacking the standard of living. That is the important thing. I wish to say quite clearly that I do not want to see a low cost of living, because I fail to see how we will get a high standard of living based on a low cost of living.
My hon. and learned Friend the Member for Kettering (Mr. Mitchison) referred to local taxes. I was once a victim of that, when local taxes were said to be too high and Income Tax was too high and the Government of the day decided to reduce them. The first body they attacked was the teaching profession, of which I was then a member They did it by reducing our standard of living, by reducing our salaries. Is that what hon. Members opposite are after?

Mr. Nabarro: The hon. Member is completely out of order.

Mr. Rankin: I am talking about taxation, and following two good examples— my hon. and learned Friend the Member for Kettering and the hon. Member himself.

Mr. Nabarro: I did not talk about local rates.

Mr. Rankin: The hon. Member talked about national rates and my hon. and learned Friend talked about local rates I am talking about both.

Mr. Nabarro: On a point of order, Sir William. I am driven by provocation to raise this. Is it possible to talk about the whole field of taxation? I scrupulously avoided talking about local rates in my speech.

Mr. Rankin: I have been skimming over it, not talking about it.

The Deputy-Chairman: I have already pointed out twice to the hon. Member for Glasgow, Govan (Mr. Rankin) that he has been straying rather far from the Question, "That the Clause stand part of the Bill." I hope that he will try and confine himself more closely to it.

Mr. Rankin: I thought that there was only one wandering boy in the Committee, and that he came from Kidderminster. I will conclude by saying that I think the hon. Member for Kidderminster has done a service in enabling us to discuss this matter today.
The hon. Member for Cheadle and the hon. Member for Sunderland, South both referred to the fact that we wanted some form of control over expenditure. We want control over more than expenditures. We want control over planning, and that is part and parcel of this debate.

The Deputy-Chairman: Order. I must seriously ask the hon. Member to pay attention. Planning has nothing whatever to do with this Clause.

Mr. Rankin: I accept what you say, Sir William, but if we are to follow the advice of the hon. Member for Kidderminster and reduce Income Tax from 7s. 9d. to 7s. 6d. then the Government will be faced with a great deal of planning in order to carry out his desire.

Mr. Cooper: I have a great personal liking for the hon. Member for Glasgow, Govan (Mr. Rankin), whom I have known for many years, but after listening to him today I am not surprised, if that is the sort of language used on the hustings, that the Labour Party finds itself so deep in the slough of defeat. The loose sort of language he has used about a "criminal class" must be rebutted, for the simple reason that to be a criminal one must break the law. As I understand it, there is no law being broken at the present time. What is happening is that certain events are taking place which, I agree, are anti-social, but to be anti-social is not to be criminal, which is a very different thing altogether.
I join in support of the hon. Member for Birmingham, Northfield (Mr. Chapman). He said quite a lot which, upon reflection, we can agree upon. We have to think of the effect of high direct taxation upon production. The importance of that is that in the social welfare services which we are trying to build up we are attempting to extend the age of children staying at school and to do more for old people. In addition, as a result

of medical science and generally better standards of living, people are living much longer than they were hitherto.
6.0 p.m.
The result is that between these two classes, of children and old people, there is the earning population which has to provide out of its production all the social services that are required. It is because we must look for this greater production all the time, to provide for far more social services, that we should seriously consider whether we should now lay greater emphasis on taxation of spending rather than on earnings. A great deal of careful thought must be given to this problem over the next year or two.
I disagree with my hon. Friend the Member for Kidderminster (Mr. Nabarro) on many points of his speech. I regret very much his personal attack on my right hon. Friend the Chancellor of the Exchequer, which I believe to be wholly unjustified and certainly not in the best traditions of the House of Commons. It is a great pity that my hon. Friend uses his very considerable talents in this language of exaggeration and personal abuse. I wish that he could be more temperate in language. If he were, I am sure that what he had to say would be listened to with far greater respect in this Chamber and in the country.
Whatever our theories may be on the disadvantages of high taxes—and my own views on the subject are well known—nevertheless we must pay for the services which we wish to provide. We as a Conservative Party have fought a number of General Elections, all of which we have won on the basis of increasing the level of the social services, and we must really pay for them. It is all very well to say that it is only before General Elections that taxes are reduced. In no fewer than seven of the nine Budgets presented by Conservative Governments taxes were reduced.

Mr. Chapman: That allegation did not come from this side of the Committee but from the hon. Member for Kidderminster (Mr. Nabarro). I do not think that it has been mentioned on this side.

Mr. Cooper: Certainly the right hon. Gentleman the Leader of the Opposition made that precise charge immediately


following the Chancellor of the Exchequer's speech after this year's Budget had been delivered to the Committee.
I am simply pointing out that in seven out of nine Budgets introduced by Conservative Chancellors taxation has been reduced. It is not true to say, as my hon. Friend the Member for Kidderminster said, that in only two Budgets have there been reductions in Income Tax. That is true, if he meant by that a reduction in the standard rate, but there was a substantial concession on the earnings allowance in one Budget, and other concessions have also been made.
My criticism of my hon. Friend the Member for Kidderminster is simply that he will not face the fact that we have a highly developed system of social services for which we must pay. All I am asking of the Financial Secretary to the Treasury is to give some thought to a matter to which we could all address our minds—whether the time has arrived when we should consider moving the emphasis of our taxation system away from earnings to spending.

Mr. Jay: I think that most hon. Members have been trying to face the realities of Income Tax today, but I am afraid that I cannot count the hon. Member for Kidderminster (Mr. Nabarro) among that number. I say to the Government straight away that I hope that they will not follow the new "Nabarro Plan," accepting increasing social expenditure and cutting rates of Income Tax right down eventually to zero. That, indeed, is the royal road to inflation if ever there was one.
I agree with the hon. Member for Kidderminster that the present Government cannot possibly claim to have been reducing taxation over these years. The hon. Member did not go back far enough. If we go back to the last full year of the Labour Government and compare the total yield of Income Tax, it will be found that it has actually risen from £1,436 million ten years ago to £2,485 million, the figure which the hon. Member quite correctly gave for the forthcoming year. That is a rise of over £1,000 million in Income Tax revenue over the last ten years under a party which claims to be steadily reducing taxation
Whatever else we say, it is clear that the Tory Party has become a party of high taxation. Nor is it true to say that this is simply because people have much higher money incomes today. Perhaps many hon. Members opposite have not realised that the actual proportion of personal income paid in Income Tax has been rising over the last five or six years. The Times published some figures just before the period of the Budget which were quoted in the Budget debate and which show that between 1954 and the latest year, in spite of alleged tax reductions, the actual proportion of ordinary personal incomes paid in Income Tax had slightly risen rather than fallen.
It follows that since the main change in Income Tax during those years was a reduction in the standard rate, which must proportionately benefit more the higher incomes, many of the lower incomes must have paid a higher proportion of income in Income Tax over the last five years. The hon. Member for Kidderminster proclaims himself a progressive. He is rather like Humpty Dumpty in trying to make words mean what he says they mean. This is not a very familiar use of the word "progressive". In taxation it means usually a type of tax which falls more heavily on those with greater means than on those with smaller means, and that is the type of tax which we on this side of the Committee stand for. It is in the reverse direction that the Government have been moving over recent years.
In considering Income Tax we ought also not to forget the enormous increase collected by the National Insurance contribution in the last few years. The total from employers and employees has risen to about £700 million a year, which is not far short of the total yield of Schedule E Income Tax for which the latest figure stands at about £900 million. There is nothing more regressive, falling proportionately more heavily on small incomes, than the National Insurance contribution. If the Financial Secretary to the Treasury took incomes from £12 a week downwards and calculated the proportionate rise in Income Tax and insurance contributions together week by week, he would find that proportionately the yield actually rose as income fell below £12. It is nonsense, therefore, for the party opposite to claim that there have


been large reductions in taxation during the last few years.
As to the future, if there are to be reductions—and I look not to one year but to some years ahead—we on this side of the Committee do not believe that a reduction in the standard rate, desirable as it is, should be the first priority. Some hon. Members have forgotten today that Income Tax is not just a tax on personal incomes. It is a tax on business profits. Much the larger proportion of the tax now comes from business profits and not from personal taxation. Schedule E raised only about £900 million out of a total of £2,400 million. Therefore the effect of any straight cut in the standard rate would be to give the greater part of the relief not to personal incomes, earned or unearned, but directly to business profits.
We say that when we are able to give reliefs on Income Tax the first priority should be by way of personal allowances, which quite clearly would give relief where the need was greatest.

Sir A. Spearman: Will the right hon. Gentleman bear in mind that only a small fraction of those business profits are actually spent? Most of the money is saved and put to depreciation.

Mr. Jay: The hon. Gentleman is quite right if he says that some is saved and put to depreciation, but when he says that only a small proportion is spent he is rather exaggerating, because something of the order of 40 per cent. to 50 per cent. is paid out in dividends.
However, I was saying that the right way is to give priority to personal reliefs which will enable us to cut some of the smaller incomes out of Income Tax altogether and give assistance where it is most needed.
What is the case advanced by hon. Gentlemen opposite for giving first priority to the standard rate? If they argue this on the ground of need, no case can be made out at all because we all know—and we have argued this many times—that a cut in the standard rate gives the greatest benefit to the individual with the biggest income and the fewer dependants. But if it is going to be argued—although it has not been seriously argued by hon. Gentlemen this afternoon—that first priority should be

given to the standard rate on the ground of incentive, it does not seem that that case has been made out.
The hon. Member for Kidderminster put the argument fairly plausibly that a reduction in the standard rate last year was followed by a big rise in production during the year.

Mr. Nabarro: And in savings.

Mr. Jay: The hon. Gentleman contends that a reduction in the standard rate would start the whole economy expanding and moving forward. The truth is that the recovery of the economy last year was due not to the effect of a change in Income Tax but to the additional consumer demand because of hire-purchase reliefs and general tax reductions in the Budget.
If the hon. Member for Kidderminster does not believe that, let him consider the years 1952 and 1957. In 1952 the then Chancellor of the Exchequer increased the earned income allowance and production stagnated throughout that year for the first time for many years. In 1957 the cut in Surtax made by the right hon. Member for Monmouth (Mr. Thorneycroft) was supposed to initiate a period of great incentive and expansion, yet we had a fall in production in that year also.
Economic experience lends no weight to this argument. Indeed, I would say to the hon. Member for Ilford, South (Mr. Cooper) that in the period he described as one of high taxation under the Labour Government production and exports rose much faster in those years than in the years when he claims that there has been a reduction in taxation.

Mr. Cooper: The right hon. Gentleman will surely concede, first, that in the years 1945 to 1951 there was virtually no production in markets overseas, which meant that we had no difficulty in selling our goods, and, secondly, that in this country we had a great void to fill as a result of six years of war?

Mr. Jay: All I am arguing is that experience lends weight to the argument that there is no connection between standard rates of Income Tax and the rate of advance in production year by year.
If hon. Gentlemen opposite are trying to make the case not on business profits


but on personal incomes they have the conclusions of the Royal Commission on taxation firmly against them. The Commission found that there was very little evidence at all on this, and it said specifically that that applied to the higher incomes as well as to the lower. If, on the other hand—and I say this in reply to the intervention by the hon. Member for Scarborough and Whitby (Sir A. Spearman)—their argument is that high taxation on business profits is a disincentive to investment, the answer is that we now have initial allowances and investment allowances which can give a substantial rebate on Income Tax to any firm which actually engages in physical investment. There is very little substance left in that argument either.
6.15 p.m.
Looking forward, it seems to us that although we do not want the standard rate of Income Tax to remain at this level indefinitely, the way that we should move is to try to shift the balance of direct taxation relatively away from personal incomes and towards business profits, particularly distributed profits. There should be a shift in emphasis from one to the other, and that should be one of our major objectives in devising the future of direct taxation. In addition, so far as the shift moves on to business profits it should be made to fall on distributed profits rather than on undistributed profits, which, as the hon. Gentleman rightly said, are put to reserve and used for ploughing back and reinvestment. If the Government had not abolished the discrimination between one and the other in the Profits Tax, that would have been easier to do.
My hon. Friend the Member for Gloucester (Mr. Diamond) suggested that there was still a great deal of room for widening the basis, as it has been called, for bringing in all sorts of income which is not yet defined as income, including capital gains—although that is not our main subject of discussion now—and also for bringing in a great deal of income which, in one way or another, is slipping through the net. I agree that if each of those things were done, other things being equal, it would be possible to have a lower standard rate than we have at the present time.
Those are the directions in which we would like to see the Government move.

Desirable though it is we should not like the Government to give first priority to a straight cut in the standard rate.

The Financial Secretary to the Treasury (Sir Edward Boyle): We have had an enjoyable and wide-ranging debate, and I think that I should be out of order, and it would be tedious for the Committee, if I tried to pursue all the subjects raised during the last two and a quarter hours. My hon. Friend the Member for Cheadle (Mr. Shepherd) in his thoughtful and helpful speech was right to remind us that when one considers the standard rate of Income Tax one has to think of it in relation to our national commitments as a whole. One has to think of it in terms of our commitments in defence, overseas aid, social services, expenditure at home, and, not least—and I was glad that my hon. Friend mentioned this specifically—our work of industrial recovery in repairing the ravages of war.
I should like to go straight to the speech made earlier this afternoon by my hon. Friend the Member for Kidderminster (Mr. Nabarro). Having read my hon. Friend's article in the Daily Telegraph, having listened to his speech to the Committee, and, if my memory serves me rightly, having heard 87 interventions from him in debates since the Budget debate, I feel a tiny bit like the Lancashire bowler, Richard Tyldesley, who when he read a series of criticisms by Neville Cardus in The Guardian, said:
I would like to bowl at that blighter one day.
He used a ruder word than blighter, but I think the point will be clear to the Committee.
I hope my hon. Friend will forgive me for saying that I do not believe that the last election was won on the economic doctrines of my hon. Friend. I believe that the principal reason for the result of the last election—I will not develop this point at length, but it was mentioned, very fairly, by the hon. Member for Birmingham, Northfield (Mr. Chapman)—was the fact that over the 'fifties as a whole there had been a 20 per cent. rise in the standard of living of ordinary wage earners. People voted at the last election for a continuation of the freer and happier lives they felt they were living, as compared with ten years ago.

Mr. Mitchison: "I'm all right Jack."

Sir E. Boyle: That is an extremely unfair comment. The whole object of our economic policy is precisely to enlarge the range of freedom of choice and of opportunity. However great may be the importance which we attach to our social services, and so on, there is nothing wrong in the ordinary individual wanting to lead a freer life than his forefathers were able to do.

Mr. Mitchison: I do not regard it as an unfair comment. What the hon. Member was talking about was the last election. We are all entitled to our views and I have expressed mine.

Sir E. Boyle: My belief is that the policies of the present Government, whose financing we are discussing this afternoon, are of value precisely for the reason I have mentioned.
I want to reply to two points made by my hon. Friend the Member for Kidderminster and then to advance a few arguments in connection with the Clause. I regret what I thought was a quite unjustified and wrong insinuation that my right hon. Friend, in his Budget last year, was influenced by political considerations in reducing Income Tax. I do not think that at the time there was any doubt in the House that we needed an expansionary Budget in order to liberate the productive energy of the country. My hon. Friend's animadversions today were completely unjustified.

Mr. Nabarro: If my hon. Friend reads my speech tomorrow he will see that two considerations found a place in my references; reflation was one and the last Budget before the General Election was the other. One is economic and the other political. As I made a speech just before the 1959 Budget urging upon my right hon. Friend five tax reductions, of which he carried out three, I am not guiltless in the political sense. But I am a political animal, and I believe in winning elections.

Sir E. Boyle: We all know that my hon. Friend is a political animal. When I read his speech tomorrow morning I hope that I shall derive greater pleasure than I derived from listening to it.
There is no reason for any member of the Committee to hang his head in shame because my right hon. Friend has not

operated the doctrine that whenever the yield of taxes goes up taxation should automatically come down. So far as the rise in the yield of taxes reflects growing pressure on resources, that may well make a Chancellor more and not less cautious. My hon. Friend's doctrine, which he stated quite clearly today, that as the yield of taxes rises so taxation should automatically fall, is the best recipe for inflation that I have ever heard in this Committee, and is certainly not in the interests of many of the worst-off taxpayers.
My right hon. Friends have an extremely good record in the matter of reducing direct taxation. During the last eight years taxes have been reduced on a number of occasions, and I have been informed only today by the Inland Revenue authorities that if we now had the tax rates that were in force in 1951–52 the prospective yield of direct taxation in the current financial year would be £1,300 million higher than it is. We have already substantially reduced direct taxation, and we hope in the course of this Parliament to make further reductions in the burden of taxation on individuals.

Mr. Jay: Is the Financial Secretary aware that it could equally truly have been said that if the tax rates in force in 1945 had still been in force in 1951 the revenue would have been £1,500 million higher?

Sir E. Boyle: That may be true, but it does not in the least invalidate my point, which is that by a series of reductions of taxation, not only in the standard rate but also through an increase in the earned income allowances and an extension of the earned income allowances into the Surtax range, the present Government have substantially reduced the burden of direct taxation during their term of office.
The fact remains that in view of our commitments as a nation any Chancellor of the Exchequer, in any year, must consider carefully what the standard rate should be. I do not believe that it makes sense to talk of making a painless reduction in the standard rate every year.

Mr. Mitchison: As Alice might have said to the March Hare, if the burden of taxation has been reduced, why is it that we pay more taxes?

Sir E. Boyle: The hon. and learned Member is well capable of making a distinction between the rate of tax, the yield of tax, and the burden of tax. We are now discussing the rate of tax. The yield of tax depends upon the level of production and economic activity. I would remind the hon. and learned Member that as the national income rises, and as we become more prosperous as a nation, the burden of taxation automatically becomes more supportable. There are three different factors, and the hon. and learned Member is capable of distinguishing between them. When he compares our record with the record of the Labour Government he must remember that in 1945, just after the war, we started with what were deliberate wartime levels of taxation.
I want to say a few words about the position today. There are three main reasons why my right hon. Friend inevitably had to take a cautious attitude in his Budget this year, and why it has not been possible to reduce the standard rate. The first is a purely budgetary reason. As the Committee knows, Government expenditure this year has risen by rather more than £300 million. On that, I can only say that Government expenditure is rising not because of the policies embarked upon since the election but in full implementation of the policies on which we fought the election. Further, in my view nothing is more cruel and unjustified than promising people social benefits and then suggesting that they can get them without paying for them. Any attempt to have social benefits without paying for them through taxation can only result in a fall in the standard of living of those who are least able to afford it.
The second reason why we cannot reduce the standard rate is the general economic pressure on our resources. As I ventured to say in the Budget debate, it is not only Government expenditure that is potentially inflationary, or that makes an impact on our resources; all expenditure has an impact on our total resources. I thought that it was fairly common ground in the Committee—it was certainly a doctrine expressed by my right hon. Friend the Prime Minister when he was Chancellor of the Exchequer—that the Budget was one of the most important means of keeping

a balance between our productive resources and the claims made upon them.
My right hon. Friend the Chancellor made it absolutely clear in his Budget speech, and still more when he wound up the Budget debate, that one of the reasons for a firm Budget this year was to leave room for the increase in productive investment taking place in our economy. I should have thought Chat my hon. Friend the Member for Kidderminster, and those of my hon. Friends who, like myself, represent Midlands constituencies, would have been well apprised of the importance of this point. If we are to earn our living in a competitive would, and push up our exports in order to earn those imports on which our whole standard of living depends, we must have an efficient industry and regular re-equipment of it. That is why I believe that my right hon. Friend has been correct in retaining the investment allowance but not reducing the standard rate of tax this year.
I have been asked what effect the Budget will have on production. I cannot be dogmatic on that point. In 1954 we had a standstill Budget and in that year the rate of production rose fairly sharply. Of course, there is a level of taxation which, if persisting for long enough, will exercise some depressing effect on production, but to say that a firm Budget for one year will affect production adversely is to be far too dogmatic. In the long run the level of production will be more affected by the level of productive investment in industry than by any other single factor.
The last reason for a firm Budget is well known to the Committee. Our balance of payments is not in such a secure position as it was a year or two ago. There is no reason for me to mention that except to remind the Committee that ultimately our balance of payments must be one of the main determinants of our economic policy in the short run. That is the third reason why my right hon. Friend cannot reduce the standard rate this year.
6.30 p.m.
In view of what was said yesterday I apologise for advancing some economic arguments to the Committee. Yesterday we heard protests about economists at the Treasury, and so on. I have heard that protest made often, although I never


heard it made with less persuasiveness than by the right hon. Member for Easington (Mr. Shinwell) yesterday. Whatever his motives, I can only express my dissent from the rather' dogmatic stand taken by the right hon. Gentleman.
In conclusion, may I say that surely the test of any economic effort, the test of our own economic effort, must, in the long run, be its achievement— whether in a purposive, thrusting manner we expand production by breaking into new export markets, and so on. It is by our record of achievement and what it means in the export field and increased productivity at home that the welfare of our people at home and our economic effort must be judged. I put it to the Committee that there is no inconsistency at all between a purposive forward-looking thrusting attitude to our economic policy, and saying that in this year, with severe pressure on resources, my right hon. Friend cannot afford to take any risks. In that spirit I ask the Committee to accept this Clause.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 14 ordered to stand part of the Bill.

Clause 15.—(ADDITIONAL RELIEF FOR WIDOWS AND OTHERS IN RESPECT OF CHILDREN.)

Sir E. Boyle: I beg to move, in page 9, line 11, after "applies", to insert "(a)".
I think that with this Amendment it would foe convenient if we discussed the next Amendment, in line 18 at the end to insert:
and
(b) to any married man who is entitled for the year of assessment to the higher relief aforesaid but whose wife was throughout that year totally incapacitated by physical or mental infirmity".
These two Amendments will enable a new category of claimant to benefit from the £40 allowance introduced by Clause 15 for widows, widowers and certain others with dependent children in the home who would be entitled to a housekeeper's allowance if they employed a resident housekeeper to look after the children. I will explain briefly the background to the Amendment.
Under Section 218 of the Income Tax Act, 1952, a man entitled to the higher married personal allowance of £240 can claim the existing housekeeper allowance for a female person maintained or employed in the home to look after a child, if, but only if, his wife is totally incapacitated throughout the year by physical or mental infirmity. As Clause 15 is drafted, a married man getting the higher personal allowance is debarred from claiming the £40 alternative allowance even if the has a dependent child and his wife is totally incapacitated. This seems unfair to us when he could have had the £75 alternative if he employed a resident person to mind his child.
Therefore, we have decided on further consideration that a married man with a dependent child or children in the home, whose wife is totally incapacitated throughout the year, shall foe allowed to claim the £40 allowance if he does not employ a resident person to mind his child. I think this a justifiable Amendment. The cost of the extension will be negligible and I commend it to the Committee.

Mr. Douglas Houghton: I am sure the Committee is grateful to the Financial Secretary for having explained that this addition to the Clause removes what would otherwise have been an anomaly. We are now going to give a new relief corresponding to all groups who would be able to claim the housekeeper relief if they employed a housekeeper. I think this completes the circle of the new relief and we are grateful that it has been amplified in this way.

Dame Irene Ward: I am grateful that my hon. Friend has introduced this Amendment. Income Tax allowances are difficult and complicated to follow and all the more so for a spinster, as I am, or indeed for a bachelor, as is my hon. Friend. But in spite of the fact that I am grateful, I wish to make a point which I consider of importance.
Unlike my hon. Friend the Member for Kidderminster (Mr. Nabarro), I do not think that any contribution of mine in the House of Commons prior to the last General Election made any impression on the result of the General Election, because all the things I fought for were refused by the Chancellor. I think that the North Country did me pretty well


from the point of view of the Parliamentary majority that I obtained, because I lost almost every battle that I fought.
I have always felt regarding Chancellors of the Exchequer—my right hon. Friend and his predecessors—that their responsibilities are great. I consider that there are some very wise officials at the Treasury, but it is very difficult for my right hon Friend ever to alter the pattern. I am not at all satisfied that small matters of this kind—taken by and large they are small—are sufficiently considered. When I approached the Chairman of Ways and Means about an Amendment I wished to table, he said that we could not have manuscript Amendments about small points. But I do not think that bachelors and spinsters can be regarded as "small points", nor do I think that a married man whose wife is totally incapacitated is a "small point".
When certain ideas and thoughts occur to my right hon. Friend the Chancellor they are embodied in his Budget and translated into the Finance Bill. Then it is discovered—as has been discovered in this case—that quite an important, if a small, section of the community has been overlooked. This state of affairs reveals to me that when the Chancellor, thinking out his Budget, decides what he will be able to do, he has not really gone into the details regarding small personal allowances and small tax reliefs and so on. If he had, he would have known about this matter before he introduced his Budget and put it into legislative form in the Finance Bill. I have not the slightest doubt that somebody made a suggestion to my right hon. Friend.
I wish to read a letter which appeared in the Daily Telegraph—my hon. Friend has not referred to it. I have the impression that Chancellors of the Exchequer and Financial Secretaries never wish to be influenced by the outside world. This is a very important letter, writen by the general secretary of the Infantile Paralysis Fellowship, an organisation which does a great deal of good work.
It would be a good thing if occasionally Ministers were to pay tribute to societies which, through voluntary committees, watch over the interests of people and try to see that they get fair play under our system, for that does not always happen. The point raised in the

letter is exactly the point which I believe is embodied in this Amendment. I shall not read all the nice things said about me, because that would be rather presumptuous, but I shall go on to that part of the letter which says what is particular to this Amendment. The letter says:
In the new Finance Act the only class of person who was previously eligible for the resident housekeeper allowance and who now does not apparently qualify for the nonresident housekeeper allowance is the family man whose wife is totally incapacitated as a result of poliomyelitis or other disabling disease.
In all too many cases, and often in circumstances of extreme hardship, the family man has, in consequence of the tragedy of disabling illness, the added financial burden without tax relief, of employing someone to look after his family. In most such cases the employed housekeeper is a married woman non-resident, therefore attracting no tax relief. Tax relief in such cases would in the aggregate amount to a relatively insignificant sum— totally insignificant in fact when measured in terms of family tragedy.
Then again, the writer pays tribute to me and also makes a reference to the "cheeseparing methods" of the Treasury.
I am glad that my hon. Friend the Financial Secretary has put this matter right, but at the same time I do not feel very happy about a Treasury which left out a case of this kind without recognising that it was being left out. It is extremely difficult for Members of Parliament such as myself, with very little knowledge, to know all that happens in family life. The Chancellor and Financial Secretary, although both are bachelors, could surely have obtained the advice of the Economic Secretary. Surely there must be some married man among the officials of the Treasury who could have told them about this. I should have thought some of them would have looked at a case of this kind and that it would not be left for an Amendment to be brought forward in Committee in order to cover such very tragic cases. I very much resent that fact.
I know the Chancellor is very much occupied. I feel sympathetic towards him in that connection, but I am always asking that some few people who really have these matters very much at heart and do a great deal of voluntary work in the interests of those who cannot fight for themselves, should be formed into a


small committee to look into these matters. Then representations could be made to the Treasury to see if these problems could be met. This problem has got a little complicated. Even the hon. Member for Sowerby (Mr. Houghton) did not appear to think that there was any discrimination in this Amendment. So probably I shall be told that I am wrong, but I want to know what has happened.
6.45 p.m.
People who can employ housekeepers are those with a certain amount of affluence, for in these days one has to have a pretty good income to be able to employ a housekeeper. One does not employ a housekeeper if, as someone put it, one is "an old ex-Service widow", because the housekeeper's allowance is more than the widow's pension. We are not, therefore, talking about the poorest people in the country. I want to know whether a married woman who has a totally incapacitated husband whom she has to look after as well as her children will be able to get the benefit of this concession, or has the tax structure got so involved that there is no possible way of including her? If inquiries were made, it would be possible to find how many women there are in that situation. Is such a woman, with a totally disabled husband, who cannot go to work because she has to look after the home and the children, to take on the whole of this burden and not have the benefit?
I notice from the Amendment that the person concerned may be mentally incapacitated. Many of these women are tremendous heroines who became incapacitated through the burden and strain of trying to help the war effort, either in the First or the Second World War. Are there no means within our tax structure to help them? I gather that there are no such means, as they were not mentioned by the hon. Member for Sowerby, nor by my hon. Friend the Financial Secretary, but I know that the Treasury never goes further than it needs to go. Is a married woman with a totally incapacitated husband, or a mentally deranged husband, and who has the burden of looking after the family, to have a similar benefit to that provided in this Amendment?
I suppose my hon. Friend will reply that a married man needs a married woman. I do not know; this is beyond me. I want to know if a married woman, under similar circumstances, is to benefit. May I have an assurance that on Report provision will be made so that these very gallant women, who do a great service to the country as a whole, shall be as fairly treated as a married man with an incapacitated wife? That is all I want to know and I do not know what I shall do if the answer is in the negative, for no one will want to divide against this Amendment. My goodness, sometimes I hate being a Member of Parliament because of the injustices which ought to be remedied but are not remedied and I do not know what to do about it.
If I cannot find a way of remedying this injustice, I do not know what to do about it. I throw myself—[HON. MEMBERS: "No."]—on the sympathy of my hon. Friend. I only hope that when he does get married, as I am sure he will, he will not have to stand up to some of the difficulties to which some people have had to stand up. I hope the hon. Gentleman—I call him my hon. Friend because I am very devoted to him—will not reject this plea.

Mr. Manuel: I want to put one or two points to the Financial Secretary. First, I wish to say how very fully I support the case put by the hon. Lady the Member for Tynemouth (Dame Irene Ward) for equality of treatment between the sexes in this matter. I do not think the Financial Secretary can produce any logical argument against the case which she has made for people who suffer in the way she instanced having this extension of personal allowance if either the man or the woman needs home help and support.
I thank the Financial Secretary for the extension provided by this Amendment. If I understand correctly, he indicated that there would be an extension of the personal allowance scheme to the extent of £40 a year. Am I correct?

Sir E. Boyle: I shall answer at the end of the debate.

Mr. Manuel: Whatever the figure is, I wonder if the qualifications would not necessarily be what the hon. Lady suggested—that it would not necessarily


have to be a family in fairly affluent circumstances which could have a housekeeper. I take it that the case of a working-class family where a local authority made the home-help service available, and where the husband was going to work while his wife was totally incapacitated so that the help had to come in every day, would qualify. Many such cases would arise.
In explanation of the Amendment, the Financial Secretary said that this personal allowance extension would be made in the case of total incapacity of the man's wife during the whole year. I take it that the hon. Gentleman was talking about the financial year and not the calendar year—the whole of the year. I wonder if he could divert his thoughts to the type of case in which a man might be totally incapacitated for eleven months of the financial year. Would there be a graduated scale of personal allowance by which that family or that particular Income Tax payer could have the personal allowance to the extent of eleven-twelfths of the sum indicated by the Financial Secretary?

Mr. Shepherd: May I put a point to my hon. Friend the Financial Secretary? As I understand it, this concession applies only to those who have a child. I think that this limitation is not realistic.
I may quote the case of a constituent of mine. His wife has been struck down by a serious and apparently incurable disease. Very properly, he does not wish to send her into an institution provided by the State but wishes that, for the remaining time that she has to live, she should be in her own home with him. He will not, I understand—he certainly cannot at present—get any tax concession for the help which he must of necessity employ in order to carry out that very proper intention. This Amendment will not, in fact, enable that man, whose case in my view is on a par with many others, to get that concession and to receive relief. Therefore, I ask my hon. Friend to consider, between now and Report, whether he cannot incorporate some Amendment to enable that sort of case to be dealt with.

Sir E. Boyle: I will certainly take note of the points that have been made in the last few minutes and consider whether any Amendment is needed in detail on this suggestion on Report.
I should like to answer the more substantial point raised by my hon. Friend the Member for Tynemouth (Dame Irene Ward), who asked about the converse case in which the husband was incapacitated. I must confess that I started, when the point was first raised by my hon. Friend, by wondering why, as one might well feel, there was assymmetry here, but I do not now feel that the conditions are on all fours. I will try to explain.
The whole point of my right hon. Friend's Amendment is that the married man can already claim the existing housekeeper allowance for
a female person maintained or employed in the home to look after a child for whom he gets a child allowance if the wife is totally incapacitated throughout the year.
That is the extent of the provision. The point is that there are young children in the home, but there is no wife to perform the normal duty of looking after the children.
Since the man with children and a totally incapacitated wife gets the £75 allowance if a resident person is employed to look after the children, my right hon. Friend came to the conclusion that it was only fair to give him the £40 alternative allowance if he made other arrangements. The hon. Member is quite right. It involves the resident housekeeper looking after the children —not arrangements which do not involve employing resident assistance
In the opposite case where the husband is incapacitated, there is no provision for the £75 housekeeper allowance to be made, and it is for that reason that that case is not covered by Clause 15. This is the answer to my hon. Friend. This is the alternative to arrangements already existing for the grant of the housekeeper allowance. Though the work of looking after an invalid husband may be a serious tie to the wife, it does not prevent her from undertaking the normal responsibilities of looking after the children, and it is the fact that some wives are unable to perform these responsibilities that leads to the housekeeper allowance being given in the first place. To give an allowance where a man is incapacitated would be to give an allowance not for the care of the children, but in respect


of the husband's disability. This is a point which we have often discussed in the Committee—whether or not there should be a disability allowance. Ministers on both sides—my right hon. Friend and I think hon. and right hon. Gentlemen opposite—whenever this point has been raised, have always felt obliged to resist that suggestion. Now we have a new Clause drafted on this subject and no doubt we shall discuss it later on in our proceedings.
The short answer to my hon. Friend, and I say this not in any unsympathetic spirit, is that this £40 allowance is meant as an alternative to the £75 housekeeper allowance which already exists, but there is no such allowance to which the £40 widow's allowance could be an alternative. That would involve bringing in a new kind of disability allowance, which raises a completely separate subject.
My hon. Friend the Member for Cheadle (Mr. Shepherd), and an hon. Gentleman opposite, asked whether this was an "all or nothing" allowance, and whether one could get this disability allowance for a proportion of the year. I am afraid that the answer is "No.". This was the condition made by the late Sir Kingsley Wood in 1943 for the resident housekeeper allowance, and it must apply to this alternative allowance, too.

Mr. Houghton: The Financial Secretary has explained the point very clearly, and the hon. Lady will now know that the case which she mentioned will not be covered by the Amendment which the Financial Secretary has proposed, because that case would not be covered by the main housekeeper relief in Section 218 of the Act of 1952.
It may be that there is a deficiency in the main housekeeper relief in Section 218 in the case of an incapacitated husband. I think there is, but this main relief is confined to the married man with children whose wife is totally incapacitated, physically or mentally, throughout the Income Tax year. As the Financial Secretary has explained, it is on the basis that the wife is incapacitated from looking after the children. Therefore, on the employment of a housekeeper, the husband is given additional relief for the housekeeper, in addition to that which he gets as a married man.
What happens, then, if it is the husband who is totally incapacitated? The Financial Secretary says that if we gave relief for a totally incapacitated husband whose wife is able to look after the children, it could not be for the purpose of employing a housekeeper, because in fact she was physically able to take care of the children. But that overlooks the possibility that she may have to become the breadwinner, and therefore a housekeeper is necessary to look after the children while she goes out to earn the money for the support of the family. In such circumstances, it seems that relief should be given.
May I draw attention to the fact that a widow who employs a housekeeper to look after her children while she goes out to work is entitled to the housekeeper's allowance, and indeed, under the alternative relief in Clause 15, a widow who goes out to work full-time, or is herself totally incapacitated, will get this additional relief, even though in her case she has no children to look after.
In these circumstances, there are anomalies, and I think that everyone realises that there are anomalies in the housekeeper's allowance, and, therefore, they must be reproduced in the alternative relief now proposed in Clause 15. The Royal Commission had some criticisms to make of the housekeeper's relief, but its remedy was to restrict its application and not to extend it. The Committee may remember that the Radcliffe Commission suggested that the housekeeper's allowance should be confined in all cases to those where there were young children to be looked after, and should not be given, as it is at present, to widows and widowers who employ housekeepers even though they have no young children.
I suggest that we should allow the Financial Secretary to reconsider the matter in readiness for the later stages of the Bill, because if he is to alter Clause 15 to meet the point made by the hon. Lady the Member for Tyne-mouth (Dame Irene Ward), he must at the same time alter the substantive relief in Section 218. The two things go together. Clause 15 is merely an alternative relief to the main relief, on a smaller scale, in cases where a resident


housekeeper is not employed. The conditions of the relief are identical in both cases where there are young children.
I am afraid that we must leave the Financial Secretary with an obvious anomaly on his hands. I imagine that the amount of money involved is negligible, because, happily, the number of Income Tax claimants whose husbands are totally incapacitated is, I think, a small proportion of the total number of taxpayers. The hon. Lady the Member for Tynemouth, however, has made a point which the Financial Secretary has not disposed of in his reply. But a bigger reform than the mere Amendment of this Clause will be necessary to put it right.

Dame Irene Ward: I think it would be convenient, Mr. Thomas, if I gave my answer on the Question, "That the Clause stand part of the Bill". I have some substantial points to make, and if I can catch your eye I will try to make them on that Question.

7.0 p.m.

Dr. Edith Summerskill: If I cannot appeal to the Minister on the moral issue, may I put another consideration to him? I am glad that the Chancellor of the Exchequer is here and I hope that he will be sympathetic on this issue.
The Financial Secretary, in another rôle, asked married women to go back to teach in schools. The need for women teachers is very great, as is the need for women doctors in clinics. From the point of view of the economy, it is in the interests of the country that professional women should go back to work and use their time in the job for which they have been trained. If they do this and leave their homes, there is no one to look after their children, if their husbands are incapacitated, and no one to do the housekeeping. They are denied any help. As a consequence, the help which is very necessary in the schools and the Health Service is denied to the country.
On a lower plane, may I remind the hon. Member that it costs the country £15 a week to keep a chronic invalid in an institution? A woman with a totally incapacitated husband—mentally incapacitated, which was a case mentioned by the hon. Lady the Member for Tyne-

mouth (Dame Irene Ward)—is therefore tempted to say to the doctor, "Can you find a place in an institution for my husband?". That would cost the country £15 a week. The Minister should, therefore, be receptive of the idea which has been put to him, because it is more economic in those cases to give women the allowance which men are being given. Will he, between now and Report, seriously consider this appeal and put down an Amendment to meet it?

Sir E. Boyle: I will not detain the Committee for more than a minute.

Dame Irene Ward: But I shall.

Sir E. Boyle: I thought my hon. Friend intended to wait for the Question, "That the Clause stand part of the Bill".
I thought that the hon. Member for Sowerby (Mr. Houghton) got to the root of the matter when he said that we are here discussing a subject which raises a wider issue than can properly be covered by an Amendment to the Amendment which I have moved. This question is whether we should have what may be considered a far-ranging Amendment to the whole principle of the housekeeper allowance, which on earlier occasions in the Committee has been called a disability allowance.
We are here dealing with an important subject. My right hon. Friend will certainly take due note of what the right hon. Lady the Member for Warrington (Dr. Summerskill) said, but I cannot undertake to put down an Amendment to meet it on Report. We may have a latter opportunity of considering this subject if a new Clause on the Order Paper meets with the Chairman's favour.

Amendment agreed to.

Further Amendment made: In Clause 15, page 9, line 18, at the end insert:
and
(b) to any married man who is entitled for the year of assessment to the higher relief aforesaid but whose wife was throughout the year totally incapacitated by physical or mental infirmity".—[Sir E. Boyle.]

Mr. Houghton: I beg to move, in page 9, line 32, to leave out "forty" and to insert "fifty".

The Temporary Chairman (Mr. George Thomas): May I suggest that with this Amendment we should discuss the new


Clause in the name of the right hon. Member for Huyton (Mr. H. Wilson),
increase of relief for claimant depending on services of a daughter".

Mr. Houghton: That, I am sure, will be for the convenience of the Committee.
We come to the amount of this new relief. In Clause 15 the amount of this relief is to be tax on £40. It is one of the curiosities of the procedure of the Committee that we have to explain Amendments to a Clause before the Clause itself has been explained, and that sometimes puts us in a difficulty. By now, however, I think that the Committee understands that the new relief is the answer to a claim which has been made in Committee, particularly from benches on this side of the Committee, for some concession to be given to widows and widowers, and others similarly classed for the purpose of the housekeeper relief, where they do not employ a resident housekeeper and are therefore disqualified from the main housekeeper relief.
Part of that plea has been that many taxpayers are unable to afford a resident housekeeper and, under the main housekeeper relief, residence with the taxpayer is a condition. Many times hon. Members on both sides of the Committee have asked, "What about those people who for many reasons, mostly expense, are not able to employ a resident housekeeper but who have someone to come in for the main part of the day, to take care of the children, to see them off to school, to get their meals, to return in the evening and to put them to bed, and generally to take charge of the household, without actually living in it?" Under the present conditions of the housekeeper relief, the taxpayer can get no concession for employing such a person; she must be resident with him in all cases.
We have said that that is unnecessarily restrictive and that many people who are incurring expense on account of being widows or widowers with or without young children are unable to employ a resident housekeeper but nevertheless have to have some substantial help in the house.
The new relief meets that grievance up to a point. It proposes to give this modified relief to widows and widowers, and married men with totally incapacitated

wives, who have young children but who do not employ a resident housekeeper. The Committee will realise that this new relief is confined to those taxpayers who have young children. The main housekeeper relief is not confined to widows and widowers with young children. A widow or widower without young children who employs a resident housekeeper can claim housekeeper relief, but this modified relief is restricted to those widows and widowers who have young children but who do not employ a resident housekeeper. I emphasise that fact because in all cases with which we are dealing in this modified relief there will be young children.

Sir James Duncan: The hon. Member persists in saying "young children". It is all children.

Mr. Houghton: I mean children qualifying for child relief. That is a convenient term to use in this connection.

Sir J. Duncan: Under 16.

Mr. Houghton: Yes, under 16, or even over 16 if they are continuing full-time education. I think the Committee appreciates that it is a sufficiently descriptive term for children who normally qualify for child relief under these Clauses.
Is £40 enough? Where does the £40 come from? The only other tax relief of the same amount is in Section 217 of the Income Tax Act, 1952, which is the relief given to a claimant by reason of old age or infirmity who is compelled to depend upon the services of a daughter resident with and maintained by him. In such a case, he is entitled to relief of tax on £40. That is the same amount as is proposed in Clause 15.
We shall have to look at the origin of the £40 and consider whether it is appropriate to the relief in Clause 15. When the housekeeper relief was £50 in 1952–53, the relief under Section 217 for a dependent daughter looking after an infirm father was raised from £25 to £40. In 1953–54 the housekeeper relief was increased from £50 to £60, but the relief for a dependent daughter under Section 217 remained at £40. It is proposed in a subsequent Clause to increase the relief for a housekeeper from £60 to £75, but the relief under Section 217


remains at £40. That appears to be taken as the token for the relief under Clause 15.
Forty pounds is too low in relation to the higher relief given for a housekeeper since this £40 relief was debated in 1952–53. There is only £10 in it, and it is tax on £10, which makes it smaller still. The total cost of the new relief is shown in the Financial Statement to be only £2 million in a full year. Therefore, an increase from £40 to £50 is scarcely likely to cost more than a few hundred thousand pounds.
I know that if I ask for the £40 in Clause 15 to be lifted to £50 it will be necessary later to raise the relief in Section 217 from £40 to £50, but the cost of that Section is also negligible. Therefore, I hope that the Chancellor will be able to agree that we should lift the relief in Clause 15 from tax on £40 to tax on £50. That will still be very small. Indeed, all the personal reliefs are very small today, looked at in the light of the change in the value of money. I will not dilate on what some of the personal reliefs should be if they were in proportion to the pre-war value of money. They would certainly be very much higher than they are today.
Indeed, the relief about which we are now talking would not be £50 but £70 if it were put in its proper proportion in 1938–39 terms. Therefore, to raise it to £50 is a modest increase. I believe that it is in proportion to the other reliefs we are giving for other causes. It is a very small additional concession to ask for, and I hope that the Chancellor will be able to accept it.

7.15 p.m.

Dame Irene Ward: I support the Amendment. I shall not go into all the arguments used by the hon. Member for Sowerby (Mr. Houghton). I have one or two pungent ones to put on the Question "That the Clause stand part of the Bill". However, this is my opportunity to say something. It is the most difficult thing in the world to address the Committee or the House of Commons in detail on any of these matters, because, taking it by and large, very few people get down to the details of all this.
I return to my own complaint. The Chancellor of the Exchequer and the Financial Secretary just think, "This is what we will do". There has never been

any proper consideration of how it all works out, whether it is right, whether it is fair, whether it is just, or whether it meets the case. It is absolutely true that the fall in the value of money has had the most tremendous effect on certain sections of the community who are not included in the general overall prosperity of the country.
There are plenty of people in the House of Commons, in the Government, and in the country, to argue for the people who have reasonably good incomes. Many of the reasonably good incomes belong to people who used to, and I dare say sometimes still do, support the Socialist Party. These people, with their little allowances, trying to do their best to prevent their relatives going into institutions, looking after them and behaving like Christians in the very best sense, do not mean a thing to the Treasury. The Treasury never gets down to looking at these facts.
I feel very strongly and deeply about this subject. I am not an emotional person, because I come from a tough part of the world where emotion does not go down. If my hon. Friend the Financial Secretary likes to come to a public debate with me in the north of England, he will realise that these people for whom we are trying to do something today are the kind of people who agree with the views which I am putting forward and which were put forward by the hon. Member for Sowerby.
I do not want to disagree too much with the hon. Member for Sowerby, because he and I have worked together in a number of good causes, and I am very proud of it. Further, in many things, but not all, the right hon. Lady the Member for Warrington (Dr. Summerskill) and I think together. However, it is all very well the hon. Member for Sowerby saying that he and his hon. Friends have been more interested in this than the Conservatives.
I tabled an Amendment, but my Amendment was ruled out of order— heaven knows why. I was not called to move my Amendment, which was on the Notice Paper before anyone else's. It was on the Notice Paper before the Amendment moved by the hon. Member for Sowerby, before the Treasury's Amendment, and before anyone else's Amendment. The Chancellor of the


Exchequer had to table a starred Amendment because something suddenly came to his notice. I tabled my Amendment, and it was ruled out of order.
It is almost impossible for me to fight in the House of Commons for the people in whom I believe, but I shall fight for them to the death. I have every intention of voting for this increase. I cannot convince the nicest Chancellor of the Exchequer and the nicest Financial Secretary to look at these things. They do not look at them. I often ask myself what I can do to make them look at them.
My right hon. Friend the Chancellor of the Exchequer one day wrote me a most enchanting letter which I shall include in my memoirs when I write them. The Chancellor said to me, "Your letters are private hell". I want them to be public hell. It is no good my letters being private hell. If they are public hell, my right hon. Friend will have to do something about it.
I hope that we shall have a real promise, and not all this business of my right hon. Friend saying that it does not fit into this Act or that Act, or this part of the Finance Bill or that part of the Finance Bill, or that part of the tax structure, or this part of the tax structure. Such statements do not mean a thing to me. I do not care twopence about them. What I want is action now. I hope that I shall get it.

Sir E. Boyle: I think that the Committe was well aware, even before this evening, that my hon. Friend the Member for Tynemouth (Dame Irene Ward) is a spinster and that my right hon. Friend and I are bachelors, but this is the first time I have heard that my hon. Friend has ever had any difficulty in addressing the Committee, as she says, on points of detail.
I should like to assure her, before replying to the debate on the Amendment, that it was quite untrue to suggest that my right hon. Friend skimps the work when it is a matter of considering what can be done for the social service classes and those who are less well off. My right hon. Friend has a record of helping those worse off, and those on small fixed incomes, that can bear comparison with the record of any other Chancellor of the Exchequer. Nobody

could be more concerned about those people than he is.
It is always difficult to reply to this type of Amendment, because I cannot pretend to put to the Committee a cast-iron case for the £40 allowance as against the proposed £50, any more than I can put a cast-iron case for the £50 as against the £40. Any previous occupant of my office will know the difficulty of debating such an Amendment. It seemed to my right hon. Friend that the amount of the allowance proposed—£40 —was not ungenerous; it is just over half the amount of the allowance where there is a resident housekeeper to look after the child or children, which will be fixed, if the Committee agrees, in the next Clause at £75.
I do not think that one can say, a priori, that £40 is out of scale. All I can say is that my right hon. Friend does not feel that this year he can go beyond £40. This is a new type of alternative allowance, and we want first to see how successful it is in meeting the needs. My right hon. Friend certainly does not rule out for all time the possibility of increasing the amount. An allowance of the size proposed in the Amendment would cost about £½ million in a full year. My right hon. Friend does not feel that this year he can go beyond the £40 that has been put forward in the Clause. Therefore, in view of what I have said, I can only ask the Committee to come to such decision on the matter as it thinks right—

Mr. Jay: Can the Financial Secretary say, at least in principle, why the allowance should be totally out of relation in terms of the change in the value of money since before the war?

Sir E. Boyle: I do not think that that is true. The important thing here is the sort of relation between this alternative allowance and the £75 housekeeper allowance. As I say, I do not think that £75 or £40 is, a priori, unreasonable. At any rate, in this year's circumstances, my right hon. Friend does not feel that he can go further than he has.

Mr. Honghton: That is a most miserably lame reply, and we are very disappointed with it. If the right hon. Gentleman cannot go up from £40 to


£50, we on this side must give him a "push, and I must ask my right hon. and hon. Friends to divide on this.

Question put, That "forty" stand part of the Clause: —

The Committee divided: Ayes 200, Noes 133.

Division No. 87.]
AYES
[7.23 p.m.


Agnew, Sir Peter
Glyn, Sir Richard (Dorset, N.)
Nugent, Sir Richard


Aitken, W. T.
Goodhart, Philip
Osborn, John (Hallam)


Allason, James
Green, Alan
Page, A. J. (Harrow, West)


Amory,Rt.Hn.D.Heathcoat(Tiv'tn)
Gresham Cooke, R.
Page, Graham


Barber, Anthony
Grimston, Sir Robert
Pannell, Norman (Kirkdale)


Barlow, Sir John
Grosvenor, Lt.-Col. R. G.
Partridge, E.


Barter, John
Hall, John (Wycombe)
Pearson, Frank (Clitheroe)


Batsford, Brian
Hamilton, Michael (Wellingborough)
Peel, John


Beamish, Col. Tufton
Harris, Frederic (Croydon, N.W.)
Percival, Ian


Bell, Ronald (S. Bucks.)
Harris, Reader (Heston)
Pickthorn, Sir Kenneth


Bennett, F. M. (Torquay)
Harvey, John (Walthamstow, E.)
Pilkington, Capt. Richard


Bennett, Dr. Reginald (Gos &amp; Fhm)
Hay, John
Pitman, I. J.


Bevins, Rt. Hon. Reginald (Toxteth)
Heald, Rt. Hon. Sir Lionel
Pitt, Miss Edith


Biggs-Davison, John
Hendry, Forbes
Powell, J. Enoch


Bingham, R. M.
Hicks Beach, Maj. W.
Prior, J. M. L.


Bishop, F. P.
Hill, J. E. B. (S. Norfolk)
Prior-palmer, Brig. Sir Otho


Bossom, Clive
Hirst, Geoffrey
Ramsden, James


Bourne-Arton, A.
Hobson, John
Rawlinson, Peter


Box, Donald
Holland, Philip
Redmayne, Rt. Hon. Martin


Boyle, Sir Edward
Hollingworth, John
Rees, Hugh


Brewis, John
Hopkins, Alan
Rees-Davies, W. R.


Bromley-Davenport, Lt.-Col. W. H.
Hornby, R. P.
Ridley, on. Nicholas


Brooman-White, R.
Howard, Hon. G. R. (St. Ives)
Ridsdale, Julian


Browne, Percy (Torrington)
Hughes Hallett, Vice-Admiral John
Roberts, Sir Peter (Heeley)


Bullus, Wing Commander Eric
Hughes-Young, Michael
Robinson, Sir Roland (Blackpool, S.)


Butcher, Sir Herbert
Hulbert, Sir Norman
Roots, William


Butler,Rt.Hn.R.A.(SaffronWaldon)
Hutchison, Michael Clark
Russell, Ronald


Carr, Compton (Barons Court)
Iremonger, T. L.
Scott-Hopkins, James


Cary, Sir Robert
Jackson, John
Seymour, Leslie


Channon, H. P. G.
James, David
Shaw M.


Chichester-Clark, R.
Jenkins, Robert (Dulwich)
Shepherd, William


Clark, Henry (Antrim, N.)
Jennings, J. C.
Simon, Sir Jocelyn


Clark, William (Nottingham, S.)
Johnson, Eric (Blackley)
Skeet, T. H. H.


Clarke, Brig. Terence (Portsmth, W.)
Kerans, Cdr. J. S.
Smith, Dudley (Br'ntf'rd &amp; Chiswick)


Cleaver, Leonard
Kerby, Capt. Henry
Smyth, Brig. Sir John (Norwood)


Cole, Norman
Kerr, Sir Hamilton
Stanley, Hon. Richard


Collard, Richard
Kirk, Peter
Stevens, Geoffrey


Cooper-Key, Sir Neill
Kitson, Timothy
Stodart, J. A.


Cordeaux, Lt.-Col. J. K.
Lambton, Viscount
Summers, Sir Spencer (Aylesbury)


Corfield, F. V.
Langford-Holt, J.
Sumner, Donald (Orpington)


Costain, A. P.
Legh, Hon. Peter (Petersfield)
Talbot, John E.


Courtney, Cdr. Anthony
Lewis Kenneth (Rutland)
Tapsell, Peter


Craddock, Beresford (Spelthorne)
Llliey, F. J. P.
Teeling, William


Crosthwaite-Eyre, Col. O. E.
Linstead, Sir Hugh
Temple, John M.


Cunningham, Knox
Litehfield, Capt. John
Thomas, Peter (Conway)


Curran, Charles
Longden Gilbert
Thornton-Kemsley, Sir Colin


d'Avigdor-Goldsmid, Sir Henry
Loveys, Walter H.
Tiley, Arthur (Bradford, W.)


Deedes, W. F.
Lucas-Tooth, Sir Hugh
Turner, Colin


de Ferranti, Basil
MacArthur, Ian
Turton, Rt. Hon. R. H.


Digby, Simon Wingfield
McLaren, Martin
van Straubenzee, W. R.


Drayson, G. B.
Maclean,Sir Fitzroy(Bute&amp;N.Ayrs.)
Wakefield, Edward (Derbyshire, W.)


Duncan, Sir James
Macleod, Rt. Hn. Iain (Enfield, W.)
Wall, Patrick


Eden, John
Maddan, Martin
Watts, James


Elliott, R. W.
Maitland, Cdr. J. W.
Webster, David


Emery, Peter
Marlowe, Anthony
Wells, John (Maidstone)


Emmet, Hon. Mrs. Evelyn
Marshall, Douglas
Whitelaw, William


Errington, Sir Eric
Marten, Nell
Williams, Paul (Sunderland, S.)


Farr, John
Mathew, Robert (Honiton)
Wilson, Geoffrey (Truro)


Fell, Anthony
Matthews, Gordon (Meriden)
Wolrige-Gordon, Patrick


Finlay, Graeme
Mawby, Ray
Woodhouse, C. M.


Fisher, Nigel
Maydon, Lt.Cmdr. S. L. C.
Woodnutt, Mark


Fletcher-Cooke, Charles
Mills, Stratton
Worsley, Marcus


Fraser, Ian (Plymouth, Sutton)
Montgomery, Fergus
Yates, William (The Wrekin)


Freeth, Denzil
Morgan, William



Gammans, Lady
Mott-Radclyffe, Sir Charles
TELLERS FOR THE AYES:


Gardner, Edward
Nabarro, Gerald
Colonel J. H. Harrison and


Gibson-Watt, David
Neave, Airey
Mr. Sharpies.


Glover, Sir Douglas
Noble, Michael





NOES


Albu, Austen
Blyton, William
Boyden, James


Allaun, Frank (Salford, E.)
Boardman, H.
Brockway, A. Fenner


Allen, Scholefield (Crewe)
Bowden, Herbert W. (Leics, S.W.)
Broughton, Dr. A. D. D.


Blackburn, F.
Bowles, Frank
Butler, Herbert (Hackney, C.)




Cattle, Mrs. Barbara
Jeger, George
Popplewell, Ernest


Chapman, Donald
Jenkins, Roy (Stechford)
Prentice, R. E.


Chetwynd, George
Jones, Dan (Burnley)
Proctor, W. T.


Corbet, Mrs. Freda
Jones, J. Idwal (Wrexham)
Pursey, Cmdr. Harry


Craddock, George (Bradford, S.)
Jones, T. W. (Merioneth)
Reynolds, G. W.


Crosland, Anthony
Kenyon, Clifford
Roberts, Rt. Hon. Alfred


Darling, George
Key, Rt. Hon. C. W.
Rogers, G. H. R. (Kensington, N.)


Davies, Ifor (Gower)
King, Dr. Horaoe
Ross, William


Davies, S. O. (Merthyr)
Lee, Frederick (Newton)
Royle, Charles (Salford, West)


Deer, George
Lee, Miss Jennie (Cannock)
Short, Edward


Dempsey, James
Lewis, Arthur (West Ham, N.)
Silverman, Julius (Aston)


Diamond, John
Lipton, Marcus
Silverman, Sydney (Nelson)


Dodds, Norman
Loughlin, Charles
Skeffington, Arthur


Driberg, Tom
Mabon, Dr. J. Dickson
Slater, Joseph (Sedgefield)


Ede, Rt. Hon. Chuter
McInnes, James
Small, William


Edwards, Robert (Bilston)
McKay, John (Wallsend)
Snow, Jullan


Edwards, Walter (Stepney)
MoLeavy, Frank
Sorensen, R. W.


Fletcher, Eric
Mallalieu, E. L. (Brigg)
Soskice, Rt. Hon. Sir Frank


Forman, J. C.
Mallalieu, J. P. W.(Huddersfield, E.)
Spriggs, Leslie


Galtskell, Rt. Hon. Hugh
Manuel, A. C.
Stones, William


Ginsburg, David
Mason, Roy
Stross, Dr. Barnett(Stoke-on-Trent, C.)


Gordon walker, Rt. Hon. P. C.
Mayhew, Christopher
Summerskill, Dr. Rt. Hon. Edith


Griffiths, David (Rother Valley)
Mendelson, J, J.
Sylvester, George


Griffiths, W. (Exchange)
Millan, Bruce
Symonds, J. B.


Grimond, J.
Mitchison, G. R.
Taylor, John (West Lothlan)


Gunter, Ray
Monslow, Walter
Thompson, Dr. Alan (Dunfermline)


Hale, Leslie (Oldham, W.)
Moody, A. S.
Wade, Donald


Hamilton, William (West Fife)
Morris, John
Wainwright, Edwin


Hannan, William
Moyle, Arthur
Warbey, William


Hayman, F. H.
Mulley, Frederick
Ward, Dame Irene (Tynemouth)


Henderson, Rt. Hn. Arthur(RwlyRegis)
Noel-Baker, Francis (Swindon)
Weltzman, David


Herbison, Miss Margaret
Noel-Baker,Rt. Hn. Philip(Derby,S.)
Wheeldon, W. E.


Holman, Percy
Oliver, G. H.
Whitlock, William


Holt, Arthur
Cram, A. E.
Wilkins, W. A.


Houghton, Douglas
Owen, Will
Willey, Frederick


Hughes, Hector (Aberdeen, N.)
Padley, W. E.
Wilson, Rt. Hon. Harold (Huyton)


Hunter, A. E.
Pannell, Charles (Leeds, W.)
Winterbottom, R. E.


Hynd, H. (Accrington)
Parker, John (Dagenham)
Yates, Victor (Ladywood)


Hynd, John (Attercliffe)
Paton, John
Zilliacus, K.


Irvine, A. J. (Edge Hill)
Pavitt, Laurence



Jay, Rt. Hon. Douglas
Peart, Frederick
TELLERS FOR THE NOES:




Mr. Probert and Mr. Redhead

Motion made, and Question proposed, That the Clause, as amended, stand part of the Bill.

Mr. Houghton: As the Financial Secretary explained, this is a new relief. A few minutes ago he said that his right hon. Friend wanted to see how it would work. I have one point to put on it, about which I have passed a note to him.
At the present time, one could qualify for housekeeper relief and in certain circumstances, as an alternative, one could claim dependent relative relief for the same person, but one could not have both reliefs. In the past, it has not mattered which a taxpayer elected to do because the amount of the relief for a dependent relative was the same as the amount of the relief for a housekeeper. Since the taxpayer could not have both, he probably claimed for a housekeeper.
Under Clause 15, it is conceivable that a taxpayer having a relative as a housekeeper might elect to claim on behalf of that relative as a dependent relative, subject to the qualifying conditions for that relief, and then, possibly, get the new

relief on top. The first two lines of Clause 15 read:
This section applies to widows, widowers and other persons who are not entitled for the year of assessment",
and so on. If the taxpayer is entitled to housekeeper relief and chooses not to claim it but, instead, to claim dependent relative relief for his housekeeper being a relative qualifying for that relief under the normal conditions, could he then ask for the relief on £40 in addition?

Dame Irene Ward: I think that my hon. Friend misunderstood me slightly when he answered what I said by discussing the Amendment and the Clause as if I was asking for the extension of tax reliefs for incapacitated people, either husbands or wives. I probably did not make it very clear, but I was asking for tax relief to be extended to a wife with an incapacitated husband who is looking after children. That was the point I was trying to make, and if I did not make it clear, I apologise.
I wish now to answer and to follow in certain respects what Che right hon. Lady the Member for Warrington (Dr. Summerskill) said. All this adds to my


criticism that these matters have never been properly examined. I resent it very bitterly. If a married woman has an incapacitated husband in the home and children to look after, she can, of course, look after the children and her husband as well. The burden imposed upon her is very great, particularly if the husband is really 100 per cent. incapacitated or mentally unstable. The injustice and unfairness in it, of course, is that if the husband is incapacitated, the wife, as the right hon. Lady pointed out, cannot possibly go out to work if she has young children.
In the Income Tax structure, a married woman who goes out to work in the normal way, whether she has children or not, has her own personal relief. She has the benefit of the graded income. A great many people consider, if I may say so—though here again neither the Chancellor nor the Financial Secretary has anything to do with children in this sense—that married women going out to work very often create a situation in which children become what are known as "latch-key" children. Those who are really interested in family life and children are inclined to think that "latch-key" children whose parents are away working very often get into trouble which sometimes leads to appearances in the courts for juvenile delinquency and possibly worse later.
If a married woman has an incapacitated husband and young children and she stays at home to look after them, she has to abandon any additional money she might otherwise earn, with the consequence that she does not then receive her own personal relief or the benefit of the graded income. In this whole concept there must be some taxable income. As my hon. Friend pointed out when winding up the debate on the last Clause, a great many people now do not pay Income Tax at all. This brings me to the point that I was trying to make. In the main, those who will benefit from this new relief must be people who already have some taxable income.
On the other hand, what one is saying to a married woman who has an incapacitated husband and children to look after is that she must bear the whole strain of that burden, a burden which in very many instances she gladly

bears—we know that there are very many magnificent wives in the country —and that, at the same time, the standard of living of her children must be reduced because, in effect, the man cannot earn and the wife is prevented from earning because of the family burden. In those circumstances, the wife cannot have the Income Tax relief under this Clause which would be available if she were incapacitated and if the husband were able to go out to work.
This really is a monstrous human injustice. I cannot understand why my right hon. Friend the Chancellor of the Exchequer has not really considered all this. The effect is really atrocious. My hon. Friend the Financial Secretary said that the last Amendment which we discussed would cost £500,000 and that the Chancellor does not feel that he could find the money in his Budget. What I am saying is that by increasing indiscriminately the widower's and widow's allowance he is giving that addition to people who may be living in very good circumstances with no financial worries or burdens at all. My complaint is not about the stringency of the Bill—I absolutely understand that— but that the money that my right hon. Friend has been able to find has been badly allocated and that no one in the Treasury has taken the trouble to find out what are the problems. I can understand it if my right hon. Friend finds it difficult to find another £500,000, but what I want to emphasise is that he ought not to give money indiscriminately to people who are in a position to pay for their own housekeepers and to look after themselves jolly well.
I believe that my complaint is right and proper. I admit that I do not know the answer. The Treasury tells us, "You cannot have it", and we are told that Section so-and-so of some ancient Act—

The Temporary Chairman: The hon. Lady must discuss what is in the Clause.

Dame Irene Ward: I am discussing what is in the Clause. The Clause, if I may respectfully say so, is wider than the Amendment. I got it absolutely taped with your predecessor in the Chair, Mr. Arbuthnot, that I would be able to


answer the argument on the Amendment on the Question "That the Clause stand part of the Bill". That is all I am doing. I will not develop the argument. I think that I have made my point quite well.
This, however, is not fair and it is not just, and I do not like to see my Government, of whom I am very proud, doing injustices and things which are not right. I do not see how I can make my complaint if, once again, the Chair says to me, "You cannot raise this or that. You cannot raise matters concerning these people, but you can talk about the Tobaco Duty, Purchase Tax and Income Tax."

The Temporary Chairman: Not on this Clause.

Dame Irene Ward: Not on this Clause. The trouble is that members of the Front Bench are always allowed to stray as wide as they like. They give all the arguments and no one ever stops them.

The Temporary Chairman: That is a reflection on the Chair.

Dame Irene Ward: I am sorry if that is a reflection on the Chair, but it is also a reflection on me, because it means that I cannot convince you, Mr. Arbuthnot, that I am doing right in answering what I said I would answer when the hon. Gentleman was allowed to make his speech. If he can be allowed to make his speech, I do not see why I should not be allowed to make mine.
I disagree with my hon. Friend's whole attitude and I hope that I shall have another opportunity, when I shall be in order, of making much more pungent and unpleasant speeches.

Mr. Peter Kirk: In view of what you have said, Mr. Arbuthnot, I hope that I shall be in order. Because I am not very well versed on Finance Bill procedure, I am not sure whether I should raise the point that I want to raise on this Clause or on the next Clause. However, I am sure that you, Mr. Arbuthnot, will stop me if I go wrong.
The point that I want to raise is small, but it concerns a matter of importance, namely, the man who has a non-residential housekeeper. I cannot expect my hon. Friend the Financial Secretary

to give a detailed answer, since I gave him the minimum amount of notice, but I hope that he will consider the matter, because it gives rise to difficulties in certain cases.
I have written to my hon. Friend about the case—

The Temporary Chairman: The hon. Member will find that his point comes under the next Clause.

Mr. Kirk: Thank you very much, Mr. Arbuthnot.

Dr. Horace King: I am in complete sympathy with all that the hon. Lady the Member for Tynemouth (Dame Irene Ward) said, even though she found it very difficult to keep within the bounds of order. It would be ungenerous not to welcome the Clause as it stands. It makes at least some concession towards the point of view which hon. Members like the hon. Lady have been advocating for quite a long time. This Clause is a concession to certain widows in that it deals with widows who have large enough incomes to pay Income Tax. We cannot under the Clause benefit widows in general, as the hon. Lady would wish, and particularly the neediest widows of the lot, but I welcome what the Chancellor has done in the Clause towards helping those who are deprived of their breadwinner. I hope that in subsequent Finance Bills the Chancellor will bear this category of citizen very much in mind.

7.45 p.m.

Mr. Richard Collard: I welcome the main feature of the Clause, namely, the extension of the allowance to all widows and widowers who have children and not merely to those who employ housekeepers, whether they have children or not. Being a widower, I have a melancholy interest in the Clause. I cannot pretend that, with one child, I have any financial hardship to endure, but I know a little of the difficulties with which widowers who have children to look after are afflicted, irrespective of whether they have a full-time or part-time housekeeper.
An hon. Member opposite said that only affluent people have housekeepers. I can assure him that it is not aoquestion of affluence but of being able to


obtain a housekeeper, either full-time or part-time. I speak only for widowers. I would not wish to speak for widows and much less for spinsters and bachelors, but I should like to refer to one or two of the difficulties. For instance, children have to be fed. If there is no one at home to prepare the meals they have to be taken out for them. In other words, one has to maintain a home of which one cannot make full use because one has to take the children out to feed them. Their washing of their clothes will certainly have to be done by a laundry. It is not likely that it will be done at home. Their mending also will probably have to be sent out. It is also fair to say that a man is rather vulnerable when it comes to buying children's clothes. The chances are that, without a wife to help him, he will spend much too much on them.
I therefore think that there is real hardship for widowers with a number of children, particularly widowers who have not much money. It would be nice if the allowance were greater, but we have discussed that already. It might be said that in that case I voted against my own interest. However, I welcome the main feature of the Clause Even though the Clause has some anomalies, I am sure that my right hon. Friend is right in introducing it.

Sir E. Boyle: We have been discussing the Clause for a little over an hour and perhaps the Committee is now ready to come to a conclusion on it. Whatever Amendments hon. Members may have wished to move, I am grateful for the welcome which the last two or three speakers, including the hon. Member for Southampton, Itchen (Dr. King) and my hon. Friend the Member for Norfolk, Central (Mr. Collard), have given to it. As it stands, it is a small but none the less useful addition to our system of allowances. It provides an alternative allowance, in cases where the housekeeper's allowance is not claimed, to widows, widowers and others responsible for the upbringing single-handed of children and not merely to people who have children.
As the Committee will realise, the housekeeper's allowance, which we have had for many years, is essentially an allowance in respect of expense falling

on households where children have to be looked after and where there are not two parents to share the task. It has always been a condition of the housekeeper's allowance that there must be a female person maintained or employed to have charge and care of the children and that she must be resident with the taxpayer. The Radcliffe Commission has not been referred to tonight, but I think that it was struck by the possibility that extra expense other than the employment of a resident housekeeper could bring about a reduction in the capacity to bear taxation when a married person is left by the other's death with responsibility for dependent children.
The Radcliffe Commission thought that the underlying principle of the allowance would be better given effect to if it were made available
to any widow or widower with a child in respect of which he or she is in receipt of child allowance.
Therefore, this Clause is in full accord with the views of the Radcliffe Commission. We have not been able to go quite as far in the amount as the Commission would have liked, but, none the less, it is in line with the Radcliffe Commission doctrine.
The hon. Member for Sowerby (Mr. Houghton) raised the very fair question of whether a taxpayer with children who has a relative or housekeeper, switching from housekeeper relief to dependent relative relief, subject to the income and other qualifying conditions, can claim the £40 relief under Clause 15 in addition. The answer is "Yes". I shall write to the hon. Gentleman explaining the legal provision which enables that to be possible.
In answer to my hon. Friend the Member for Tynemouth (Dame Irene Ward), it is most difficult when we have a very few millions to spare to know how best to give this money for the benefit of those less well off in our society. No one realises that more than I do. I have not had the experience of social work which I should like to have, but I know very well that there is a number of people in this country very badly off and not very well covered by what is conventionally referred to as the Welfare State. I think that it is the perpetual duty of the Government to find out who are the really poorest of the poor in our society and to do something for them.
I cannot go further than that tonight and my right hon. Friend cannot go further than he has gone this year. I can assure my hon. Friend the Member for Tynemouth that we are keen to get all the information we can which would enable us best to identify these classes. Any evidence which she or any other hon. Member can give us on this subject will be very carefully considered. I hope that she will not think that in our concern with the balance of payments and one thing and another we neglect those who are worst off. That is not our intention.

Mr. John Hall: Can my hon. Friend say whether the phrase "other persons" in the subsection covers divorced persons?

Sir E. Boyle: I think that I am right in saying that in certain circumstances it could cover a divorced person, but I will write to my hon. Friend on that subject.

Question put and agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clause 16.—(INCREASE OF RELIEFS FOR HOUSEKEEPER, DEPENDENT RELATIVE, ETC.)

Motion made, and Question proposed, That the Clause stand part of the Bill.

Mr. Kirk: I hope that I shall be more in order on this Clause than I was on the last one. It was difficult to see under which Clause the point I wanted to make arose.
The Financial Secretary has rightly said that the housekeeper's allowance is applicable only in the case of a man or woman, usually a man, who has a resident housekeeper. Resident, I understand, means a housekeeper who regularly passes the night in the house. The position arises of a man—I have written about a particular case to my hon. Friend but not in time to enable him to send me an answer—who, although he has children to look after—he is a divorced man but this may well apply to a widower as well—either cannot afford to have a person living in the house who will sleep there but who employs a married woman in the village to come in during the day because there is no room for a resident housekeeper. There

is a lady in the village who comes in in the early morning, stays the whole day and leaves at ten o'clock at night to go back to her own home. In that case, I imagine that he would qualify under Clause 15. The disparity between Clauses 15 and 16 is a very great one.
In this case the expenses falling on the man are very much greater than those that fall on the man in the circumstance envisaged when we were discussing Clause 15. I know that this is a difficult problem, and I am not suggesting that my hon. Friend can give me an answer or any satisfaction tonight.
I do not know how many such people there are. Since the case to which I have referred to my hon. Friend came up I have heard of two further cases in my own constituency of men whose houses are too small for them to have a resident housekeeper but who have found people living nearby, who need extra money, and who are prepared to give their services. I feel that this is a matter which might possibly be considered for next year as a kind of halfway house. If it can be proved to the satisfaction of the Inland Revenue that there is genuinely a case in which a woman is a resident housekeeper in everything but the fact that she does not sleep in the house, there might be a case for a considerably higher allowance than that provided under Clause 15, although I suppose not as high as the one which we are now providing in this Clause.
I hope that my hon. Friend will give me some hope that this matter will be considered by the Treasury between now and next year to see whether this halfway house can be provided. The fact that I have found in the last ten days three cases of this kind seems to suggest that there must be a number of people in the country who are in this difficulty largely because of lack of accommodation or perhaps also because of finance, and there would seem to be a case for some kind of half-way house provision.

Mr. Dempsey: I would ask the Minister to clarify a point in this Clause which deals with Income Tax relief for housekeepers. It is a well-known fact that in adjudicating on these cases the Inland Revenue authorities act only where there are dependent children. I should like the


Minister to clarify this position. In addition to other considerations, is the availability of dependent children the main criterion as to whether or not the recipient qualifies for this allowance?
Some of us have considerable experience of elderly persons who have invalid wives. These elderly persons are working, earning an income and paying Income Tax by P.A.Y.E. to the Revenue authorities. We discover, however, that when they apply for the allowance to assist them to maintain a housekeeper, they are normally told that as there are no dependent children in the family they do not qualify, in spite of the fact that these individuals have wives who are permanent invalids. Some of them in fact are confined to bed and unable to get about. Yet this type of Income Tax payer who works regularly to try to maintain a home and an invalid wife and provide a housekeeper receives no Income Tax allowance.
When we look at the Clause we recall cases from our own localities of people who actually have to work short time so that they may look after an invalid wife. Others have to take leave of absence for a time simply because the maintenance of a housekeeper with no Income Tax allowances forthcoming is a costly item especially when only one wage packet comes into the home.
I should like the Chancellor of the Exchequer to clarify the position. Can the Clause be interpreted to provide allowances in the instances such as I have quoted, namely, cases in which elderly persons still engaged in insurable occupations find it necessary to provide permanent assistance at home to look after a wife who is a permanent invalid? Does the Clause apply to categories of that nature or only to individuals who have dependent children? This is a heartburning issue in some parts of the country.
In my own area I have consistently had drawn to my attention instances of hard-working individuals who consider it unfair that they should be treated in this fashion when they work hard for an average pay packet a very large slice of which goes to maintain a housekeeper, yet no Income Tax allowance is given to them as a contribution towards the cost of the additional expenditure which they incur simply because they

have invalid wives who require constant attention morning, noon and night, day after day, and week after week. I therefore ask the Chancellor to advise me whether the Clause can be interpreted to cover such categories as I have quoted.

8.0 p.m.

Mr. Michael Clark Hutchison: I do not wish to make a long speech, as I understand that my hon. Friend the Member for Tynemouth (Dame Irene Ward) wishes to make points similar to mine. I should like to know from my right hon. Friend the Chancellor of the Exchequer why the Clause is restricted to widows and widowers only and why he cannot extend it to cover spinsters and bachelors.
I have a sad case of a lady in my constituency—indeed, my brother fought for her for many years when he was in the House of Commons and I am quite prepared to carry on the battle—who was injured in a motor accident. She needs a full-time housekeeper. She does not get the allowance, but had she been married, she would have done. That does not seem to me to be sensible or fair. If it is a matter of money, can my right hon. Friend give an undertaking that he will look at the matter closely and make it a high priority for next year?

Mr. John Hall: I should like to add my support to the pleas already made to my right hon. Friend the Chancellor of the Exchequer to look at the matter again and see whether the Clause cannot be widened. Several examples have been quoted from constituency experience and I should like to quote two from my own. In going round my constituency, I have been surprised very often to find the number of weekly wage earners who, for one reason or another, have to provide housekeeper services of some kind for their family. It is extremely difficult for many of them to do so. Many of them, especially those living in small houses, do not have room to accommodate a housekeeper even if they could afford a full-time residential housekeeper. In other cases, people with, perhaps, more means would be able to afford such a housekeeper, but they cannot find one who is prepared to live in and they have to have one who comes in during the day and departs later in the evening. This imposes quite a burden on them for which


they should, in justice, have the full tax relief.
It has been said quite properly that they would qualify under Clause 15. This seems to indicate that there should be a complete review of the whole question of the housekeeper allowances which are getting into a slight muddle. There are other classes of persons who should qualify—divorced persons, for example. One case from among the many in my constituency which comes to my memory is that of a man who is divorced and has a family of five children whom he has to look after. It is a difficult problem for him. As far as I can see, he does not qualify under the Clause.
I do not want to continue to add examples. All of us, on both sides, can think of many examples of people who should qualify under the Clause but who do not qualify as the Clause is drawn. I hope that my right hon. Friend will consider it again and see whether, on Report, he can do something to make it a little more comprehensive.

Mr. Houghton: We on this side welcome the improvements in these two reliefs which the Chancellor proposes in the Clause. An improvement is long overdue. The last time that these reliefs were increased was in 1953–54, when they were raised from £50 to £60. In pre-war money terms, these reliefs should now be £140, not £75. Clearly, however, to press for any increase of that nature would involve a complete review of the personal reliefs as a whole, which, we hope, the Chancellor will undertake.
When I spoke on Second Reading, I expressed regret that the Chancellor had not been able this time to deal with personal reliefs more comprehensively than he has done. Last year, the right hon. Gentleman stressed throughout our debates, when we were asking for more personal reliefs, that it was the turn of the standard rate. That was his theme song in the debates on the Finance Bill last year. We therefore hoped that this year would be the turn of the personal allowances.
Circumstances, however, have prevented the Chancellor, in his view, from bringing forward a radical change in the personal reliefs as a Whole. He has confined his attention to those which,

he thought, were in pressing need of favourable adjustment. Hence these two reliefs qualify for some increase because they have been without it longer, I think, than any other of the personal reliefs and we have just dealt with the additional relief in Clause 15.
I reinforce the plea of the hon. Member for Wycombe (Mr. John Hall), who has asked that the Chancellor should as soon as possible examine all these reliefs. They are now in a jungle. Some of them have got out of scale and it is difficult to know why and where they are. Some of them have received special attention in the past in being increased, perhaps, out of scale with others. For example, the Committee and the House at different stages have been anxious to improve the reliefs for children and we have seen those reliefs go much higher in proportion to any of the other reliefs. If, however, one examines the scale of reliefs, when they were increased and how much increase they got, it is a little difficult to regard them as being in any logical scale. That is a plea that I certainly reinforce.
Although the Clause deals with the narrow question of the amount of the reliefs, and it would be unwise of me to attempt to enlarge the debate to cover the qualifying conditions for the reliefs, I certainly hope that these, too, may receive attention in the Chancellor's review, because in the debate on Clause 15 we discovered difficulties which need attention.
Perhaps, in this and in other respects, the Income Tax Act is rather an old lady who is very much out of date. These reliefs were related to the life of taxpayers of a bygone age. They did not take into account how people had to manage amongst the wage-earning classes of taxpayer today. There is no doubt that in many cases the residence condition of the housekeeper relief is irksome. I do not know whether the hon. Member for Gravesend (Mr. Kirk) was in the Chamber when I was urging an increase of the relief under Clause 15.

Mr. Kirk: Mr. Kirk  indicated assent.

Mr. Houghton: I mentioned as an example the daytime housekeeper or the child-minder type of housekeeper who is undoubtedly one of the reasons in the


Chancellor's mind for giving this alternative relief. I doubt whether he would have been moved to give it unless, in making this additional concession, he had regarded the widows and widowers with young children as needing, in many cases, help during the day for which they had to pay. The right hon. Gentleman must have had that very much in mind.
We are grateful for what the Chancellor proposes in the Clause. We would have wished it to go further and wider, but for small mercies in the Bill we have to be truly thankful. That is the mood in which we receive the Clause.

Dame Irene Ward: I have been trying to get an extension of this relief to spinsters and bachelors for a very long time. When the hon. Member for Sowerby (Mr. Houghton) spoke about the old lady, I could almost see myself as an old lady trying to leap on the back of a Chancellor of the Exchequer. I should like to say how charmingly my hon. Friend the Financial Secretary answered my last complaint. I think that both he and the Chancellor—I have not yet crossed swords with the Economic Secretary—take what I have to say very well indeed, and I am very grateful for the little bits and pieces put into the Finance Bill.
I have been in the House of Commons for nearly twenty-five years and I have never really won the battle, but the value of that long service is that I can give the background to this business and ask the Chancellor for a proper explanation. No one really knows why this particular tax relief for widows and widowers was introduced. Many people are grateful for it, but it is given irrespective of means, of health conditions, and of age. In other words, millionaires—if there are any—will still get this relief. That is a most extraordinary thing.
When, during the war, we raised the question of extending the relief to spinsters and bachelors—I have no personal interest in this because my own household arrangements do not work that way—the then Chancellor of the Exchequer, Sir John Anderson, who was a very great man and later became Lord Waverley, said that it was an anomaly. If my right hon. Friend can find time to look up the correspondence, he will see Sir John Anderson's reply to me. He said it was an anomaly, so there is no

need to prove it now. He said that the way to get rid of the anomaly was not to extend it to spinsters and bachelors but to remove the allowance from widows and widowers.
No one wanted to do that, and one can imagine that every Chancellor, even the present Chancellor, has made that argument. It was made on the Royal Commission on the Taxation of Profits and Incomes. The Commission agreed that it was an anomaly, said that it did not understand why this special tax relief was given to widows and widowers, and recommended that it should be withdrawn.
Many of the women's organisations have made representations to the Chancellor. Not long ago I was asked if I would, once again, before the Budget was introduced, put this point to him. I replied that I did not feel I could do so, because I was afraid that it would result in the allowance being withdrawn from widows and widowers, and I did not think that was a very fair thing to do, in spite of the fact that many very affluent people—and I have seen it among members of my own family—have been able to get this allowance while widows of ex-Regular Service men are kept below the National Assistance scale—which is a very sore point with me.
I therefore did not make the representations, and then the Chancellor, in his Budget, proposed to increase the allowance. He does not extend it to batchelors and spinsters, however. What is the reason for dealing with what is an accepted anomaly in this way? It seems to me to be most monstrously unfair. Though I say a very great deal in criticism of my right hon. Friend, I simply do not believe that he cannot give proper consideration to this matter.
8.15 p.m.
My hon. Friend the Member for Edinburgh, South (Mr. Clark Hutchison) referred to the case of one of his constituents. I had a letter from that lady, because she had spoken to him and asked whether she could write to me on the subject, and he and I joined hands in the matter. He has referred in his speech to her case and now I shall read her letter, because it is tremendously important. I am sorry to inflict this on the Committee but it is a good thing for the Chancellor to hear.


This lady refers to the letter on the anomaly which I wrote in the Daily Telegraph and goes on:
Since 1941 my case has been put to the Chancellor of the Exchequer many times by Sir Ian Clark Hutchison, and now his brother Mr. Michael Clark Hutchison is taking it up, as he is my own M.P. He has today been to see me, and he says he will speak to you on this subject.
I broke my back in a car smash in Hampshire in 1939, and am paralysed from the waist down (100 per cent. disabled, and unable to do regular employment). My income is derived from an annuity purchased with damages awarded at the time of the accident.
The Committee will note the thrift of this lady. One of my complaints is that in this century we do not really acknowledge thrift sufficiently. The letter continues:
As you will appreciate this is unearned income and it has dropped considerably in value since 1939 when Income Tax was 5s. 6d. in the £. I am entitled to no disability benefits, pension or allowance as my accident occurred when I was on holiday and I was not covered at that time by National Insurance.
I am obliged to employ a full-time resident housekeeper to look after me, and as I am a single woman I am unable to get any tax relief to meet her wages.
A recommendation contained in paragraphs 201–7 of the Report of the Royal Commission … referring to the Ministry of Pensions as an assessor of total disablement has not been implemented, in fact completely ignored, and yet I am classified as 100 per cent. disabled by the Ministry of Pensions for the purpose of issuing me with an invalid tricycle.
I feel very bitter that the Chancellor has just raised the widow's and widower's housekeeper allowances to £75 per annum and has again ignored the relatively small category of people such as myself who, owing to total disablement, cannot live without paid help, and find the cost of living harder and harder to face.
This lady goes on to refer to post-war credits repayment and says that her case has been represented to my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) and to my right hon. Friend the Chancellor of the Exchequer and she says
I … continue to hit my head against a brick wall.
I suppose that she is referring to the Chancellor as the brick wall and I feel that way about it myself. She refers also to the battle that her Member and I propose to wage. I wanted to read that letter to show the inconsistency of increasing, irrespective of means, age or

health conditions, the relief for widows and widowers and doing nothing to meet that kind of case.
I have had a very big national correspondence. My hon. Friend the Financial Secretary said he was seeking evidence but this lady has written to the Chancellor. The evidence is already in the Treasury. I have not been in the House of Commons for twenty-five years without meeting many people who have written to the Treasury. I do not know whether all those letters were sold during the war when we needed paper for pulp.
I find it very difficult to answer questions about why widows and widowers of substantial means who are not working and who probably have no dependent relatives receive this allowance. I can get this increased allowance and so can thousands of people. Many jokes are made against spinsters and far more than against bachelors. Spinsters do not mind; but considering the magnificent war record of my right hon. Friend the Chancellor, I must point out that many women remain spinsters because their men were killed in the First World War. They have not remained spinsters because there has never been anyone who wanted to marry them. The best of their and my generation were killed in the First World War. Now many of these people are elderly and many of them are thrifty, but all that happens is that as long as a person is a rich widow or widower the allowance can be increased.
I feel very strongly about this. I think that the Prime Minister feels the same about people of my generation because he never makes a speech without referring to how lucky he was to come out alive. The same applies to Sir Anthony Eden. Many were lucky to come out of the First World War alive but a great many did not come out and they have left many of my generation to battle on in a very difficult, grim and anxious world.
I do not expect vast sums to be set aside in this Budget for spending on social welfare. All I have ever suggested is that out of the modest sums that my right hon. Friend has to spend he has not spent the money in the best way. Some people have said that, because he is a bachelor, widows and widowers naturally appeal to my right hon. Friend's heart. I understand that. Widows and widowers appeal much more


to the nation than do bachelors and spinsters. It is remarkable that my right hon. Friend has had so much admiration from the nation when one remembers that he is a bachelor. It shows how magnificent he is and what a wonderful personality he has. But the fact remains that widows and widowers appeal to the very highest in the people of this couuntry. They feel that if they can do something for them they have done all that is necessary.
I am glad to have the support of some of my hon. Friends and of some hon. Members opposite when I make a little plea for the bachelors and spinsters. I know that my right hon. Friend does not keep a resident housekeeper and I do not think that my hon. Friend the Financial Secretary keeps one. We hear a good deal about my right hon. Friend cooking his own eggs. We have not heard so very much about the domestic life of the Financial Secretary, but he has a very distinguished mother and she is a widow. She would be able to get this allowance. This is terribly unfair.
The Chancellor is so conservative that he must be interested in precedent. Precedent can be quoted by the Conservative Party until one nearly goes dotty. If all my right hon. Friend's predecessors have said that this is an anomaly, then, if I understand the word aright, one either has to alter it and cease to make it an anomaly or one has to wipe it out altogether. I do not mind the most glamorous and wealthy bachelors or widows having this little allowance, though I should much prefer that something should be done for Service widows who are below the National Assistance scale, and I include widows of officers and other ranks. They have been treated very badly by my right hon. Friend, but one can never get at him. When he sits at the next table to me in the Dining Room he gets up with a charming smile—

The Temporary Chairman (Mr. John Arbuthnot): Order. This does not arise on the Question.

Dame Irene Ward: I wrote a letter to my right hon. Friend about bachelors and spinsters—

The Temporary Chairman: Order.

Mr. Mitchison: Are we not to be told what happened after the charming smile?

The Temporary Chairman: That is not in the Clause.

Dame Irene Ward: I want these matters treated in a human way in the Committee. I have to listen to people with great brains talking about the balance of payments. I follow my leader on balance of payments problems and I always will, but I shall not follow him on this matter, and I do not see why I should not have the opportunity of saying so.
As I was saying, I write my right hon. Friend a letter, but when I hand it to him he puts the letter in his pocket with a charming smile and then he does not answer it. I should like to see the files on widows and widowers and bachelors and spinsters in my right hon. Friend's office. I do not believe that he ever hands my letters over to his officials. I will send my right hon. Friend a list of some of the widows and widowers who receive this allowance. I do not see why taxes should be taken from people who are not so well off in order to make this allowance to people who are well off.
I have received a most pathetic letter from a widow who cannot obtain a resident housekeeper's allowance and yet the tax reliefs which my right hon. Friend is giving are greater than her pension. She is the widow of an ex-Regular officer. The whole thing is absolutely indefensible. Bachelors and spinsters form a great part of this great nation and we would never have won the war without them. The women were in the Services or in industry during the war and the men in the fighting Services. As the hon. Member for Sowerby said, we must adopt a modern tax structure, and the Prime Minister has said that all these people must benefit from our increased prosperity. If that structure is adopted the Chancellor must include bachelors and spinsters. He would not dare to do otherwise.
The Chancellor has now promised money to these more wealthy people, and I do not suppose that he will go back on that. If I were in the Treasury I would have a good time. The difficulty


of altering the pattern of Treasury expenditure is fantastic. I do not know what members of the Treasury do. They never emerge from their little boxes, and no one knows what they are thinking, or what they are doing.
I hope that my right hon. Friend will give me a full explanation. I warn him that I do not want arguments about tax structures, Clauses, or dead Acts. I want a firm promise that bachelors and spinsters will get their rights, just as much as widows and widowers get theirs.

Dr. King: I hesitate to intervene between the hon. Lady the Member for Tynemouth (Dame Irene Ward) and the Chancellor, but I have one or two things to say. The hon. Lady occasionally rises to moments of great eloquence, and one of those moments was when she referred to the sacrifice which the spinsters of England who lost their potential husbands and children made in the first World War, and, indeed, in the Second World War.
8.30 p.m.
It would be unfair if the Committee did not express its thanks to the Chancellor of the Exchequer for the concession which he has made in the housekeeper allowance. I echo what my hon. Friend the Member for Sowerby (Mr. Houghton) said, and I hope that between now and the next Finance Bill the Chancellor will look at this again, and, indeed, at all the concessions that are made inside the Income Tax structure. This one dates back to the day when the housekeeper was either a genteel lady who was glad to work as a housekeeper for her keep, or being a widow was glad to work for anyone who would provide her with a home.
Let us consider the rate of pay for the domestic home help. If one could get a domestic home help from the local authority for as little as half a crown an hour, that would amount to about £250 a year. If one considers the amount of money that one now has to pay for a housekeeper it shows how unreal this concession is in relation to modern times.
I nevertheless welcome the concession in this Clause. I hope that from the reception which this and the previous Clause has had the Chancellor will take it that the Committee wish him to look

at the concessional element in Income Tax between now and next year because this is well worthy of his attention.

Mr. Geoffrey Hirst: I welcome the reliefs given under the Clause. After all, in a rather miserable Budget and an even more miserable Finance Bill, any relief is welcome. I support the hon. Member for Sowerby (Mr. Houghton) in his contention that the Chancellor of the Exchequer ought to look at the various allowances that fall in the framework of this and the previous Clause, because the whole thing is definitely haywire.
I do not think that it is all one way. Great social progress has been made in this country, but some people have been left far behind in the race while others have gone ahead, and these latter people do not require all the allowances which have been given in previous Acts. It therefore seems that there is room for a proper study to ensure that the resources of the nation are spread where they are needed, and there are many places today where they are needed but which are not getting them.
I regret that spinsters and bachelors have been excluded. I am surprised that the Treasury's argument is that it has not had sufficient evidence. In the past I have forwarded many letters, which I do not propose to read to the Committee unless I am asked to do so. I have received many letters, but I recently stopped forwarding them for the simple reason that I got the same long-winded answer which one gets from the Treasury when it has nothing to say. The answers have never meant a thing, and it is right that we should now have some explanation because it is about time that a proper one was given.
This is a piece of downright ridiculous mid-Victorianism. That is the basis of this, and there is no reason why we should not call a spade a spade in this generation. For some extraordinary reason it was considered not quite respectable for a bachelor or a spinster to have a housekeeper. That is the real illogicality. That is the real reason why Lord Waverley dodged the issue. I suppose he was a bit Victorian. At any rate, he looked it, however brainy he was, and he was not prepared to call a spade a spade. It is about time this was cleared up. It is the biggest piece of


nonsense that has existed within the framework of a relatively small matter. It is extremely important to those who need this assistance.
I hope that we will not get the same stodgy rubbish that I have had in letters in the past which has prevented me from forwarding further letters to the Treasury. If the Chancellor wants those letters he can have them in duplicate.

Mr. Amory: I own that when my hon. Friend the Member for Tynemouth (Dame Irene Ward) rises I am always overcome with an extreme attack of nervousness. On the last occasion when we debated this subject she reminded me that I was getting on and would soon require a housekeeper. She said it so delightfully and coyly that I found my heart fluttering agreeably. Since then she has told me off in no uncertain fashion, and tonight she likened me to a brick wall. I do not quite know where I am with her at the moment. When she said that, I thought for one moment of returning to her the large collection of letters I have from her, which I still prize. But she ended by saying such nice things about me that I am now beginning to wonder whether things are quite as bad as I thought. I had made a note to say that I noted the proposal of my hon. Friend the Member for Tynemouth, but my hon. Friend the Economic Secretary saw it and told me that in the circumstances it might be a little dangerous to make use of it.
Before I deal with the points raised by my hon. Friend, I should like to mention two other points which have been raised. The first was raised by my hon. Friend the Member for Wycombe (Mr. John Hall), who asked whether a divorced person who employed a resident housekeeper to look after children is ineligible for this allowance. The answer is that he is not ineligible. But if the taxpayer concerned was a woman she would be eligible only if she were occupied full-time in business or employment.
The hon. Member for Coatbridge and Airdrie (Mr. Dempsey) asked whether a man who had a totally incapacitated wife and who employed a resident housekeeper would be eligible. The answer is that he would be only if the

housekeeper were employed to look after dependent children.
I want to make it clear that this is a limited operation only, to increase the amount and not to change the conditions. I agree with what hon. Members have said, that a case may be made out for reviewing these allowances. I have not carried out that review, and this year I have put forward only this limited proposal But I agree that a review would be justified, in the light of other considerations, and that before another year passes we should compare this allowance with the other personal allowances in order to see whether the money is being used to the best advantage.
Once or twice my hon. Friend the Member for Tynemouth has spoken as if the allowance is confined to rich or relatively rich people. I would remind the Committee that the resident housekeeper does not have to be remunerated; she can be a resident member of a household, whose keep and board is paid for by the taxpayer concerned.
I now want to explain why I have not thought it right to extend the increase as suggested by my hon. Friends the Member for Tynemouth and the Member for Edinburgh, South (Mr. Clark Hutchison). My hon. Friend the Member for Tynemouth said that she joined hands with my hon. Friend the Member for Edinburgh, South, which made me feel a trifle jealous. I must not pursue that matter or I shall be out of order.
We must look back at the history of this allowance. When it started, it was one made to a widower with dependent children who had a resident housekeeper; that was the original position. After the Royal Commission on Income Tax had reported in 1920, the allowance was given to widows and widowers alike where a female person was employed and again where there were dependants. It was also granted to a single taxpayer who had living with him a female relative who was looking after a younger brother or sister.
In 1924 the requirement that there should be always a dependent child was dropped in the case of the widow or widower and, in the view of many of my predecessors—I think that I share it —on the whole the allowance took a wrong turning at that time. The allowance to the childless widow or widower


naturally led to other claims or extensions, but no Government ever felt that they should concede those things.
Sir Kingsley Wood, who had great knowledge of these matters, gave close study to the scope of the allowance before he added new categories of claims in 1943, and although he did not ask Parliament to undo what had been done in 1924, his proposals for widening the sphere of the allowance were centred on the presence in the home of dependent children and the absence of a wife able to perform the normal maternal duty of looking after them. So the matter stood when the Radcliffe Committee reviewed it. What that Committee said is well worth studying. Here I should acknowledge—and I think the hon. Member for Sowerby (Mr. Houghton) understands— that the alternative allowance to which effect is given in the previous Clause dealt with by the Committee is largely based on the report of the Radcliffe Committee.
The Committee was very forthright indeed when it came to discuss the branch of allowances available to childless widows and widowers. It said that the provision was an anomaly. So far I think that the Commission would carry with it my hon. Friend the Member for Tynemouth. It went on to say:
That it is anomalous is supported by the many suggestions made to us for its extension, some of which advocate even a general household allowance … or an allowance for domestic help. Such suggestions, which are primarily an attempt to rationalise the existing housekeeper allowance, carry us far from any proper idea of taxable capacity. In our view the right course is not to extend the conception into other fields but to cut out this branch of housekeeper allowance altogether.
When I decided this year that the time had come when, if these allowances were to go on, there should be a modest increase in the housekeeper allowance, I considered seriously whether at the same time I ought to ask the Committee to act on the view of the Commission and sanction the withdrawal of the allowance from all cases not involving the care of children. I do not know whether I have been too soft-hearted, but I came to the conclusion that I should be justified in not doing that Though to me the Commission's reason seems to be correct, I could see that some hardship might be caused by the sudden cessation of relief in cases where it has been enjoyed for many years.
The Committee may consider that I should have allowed for it continuing where it was already received, but complications like that sometimes result in legislation which is not good. So, rightly or wrongly—I am not sure whether I was right or not—I felt that on the whole the increase of £15—the modest increase I was making—in the existing allowance should be a general one. Although my conclusion was as I have described, I am still sure that the allowance to childless widows and widowers is foreign to the true purpose of the housekeeper allowance. Since I accept that its justification is so very doubtful it is quite clear to me, and, I hope, to the Committee, that it would be wrong to extend the allowance for the benefit of other categories of claimant who have not the responsibilities of children. If one is not quite sure that the present arrangement is justified, I think one is even more sure that it would be wrong to extend it to a wider field.
8.45 p.m.
My hon. Friend, I am sure, will not think that I have not given careful consideration to her eloquent argument, but as I see the matter, here is a difficulty of principle which stands in the way of doing what she wants me to do. The increase under this Clause is a general increase of £15 to all existing categories of claimant, and it is coupled with the same increase for the dependent relative, The Committee will see that the Clause also raises the limit to which the latter allowance, the dependent relative allowance, runs up when the relative has a small income of his or her own. In this way, the full benefit of the £15 will be felt in all cases where the relief was under the law as it stood last year.
Before I sit down, I want to say to my hon. Friend the Member for Shipley (Mr. Hirst) that he was quite wrong in the reasons he adduced why I was doing this and not extending it to spinsters. I also wish to say to him that I was very sorry about the criticism he implied, as I understood, of Sir John Anderson, whom I have always regarded as one of the finest and most distinguished Englishmen of his generation.

Mr. William Ross: He was a Scotsman.

Mr. Amory: I am deeply sorry, Sir William Anstruther-Gray. I am surprised that you did not rule me out of order. I am glad to withdraw the word "Englishman" and to substitute the word "Scotsman".
I think I have said enough to show why in this case I feel it would be wrong to extend this allowance. It represents a very limited operation to give a moderate increase in the allowance under the present conditions, but I do not disagree with the Committee that there are anomalies in this allowance and I think it would justify having a further look at it before another year.

Mr. Dempsey: In view of the Chancellor's reply to my query, to the effect that the yardstick to be employed in determining the eligibility of a householder for the receipt of the housekeeper's allowance is the existence of children of school age or under school age, may I suggest that the Ministers when reviewing the matter should bear this in mind? There could foe one child of school age in a household where several incomes are coming in which would be eligible to receive the housekeeper's allowance, whereas an elderly man maintaining an elderly invalid wife out of a single income would be receiving no allowance. In my opinion, that is a little unfair. I appeal to the Ministers, when reviewing the matter in the near future, to bear these companisons in mind and to give sympathetic consideration to the elderly man still working in modern society and trying to maintain his permanently disabled wife and also a housekeeper.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 17.—(INCOME TAX RELIEF FOR NATIONAL INSURANCE CONTRIBUTIONS.)

Mr. John Howard: I beg to move, in page 10, line 23, after "Act", to insert:
other than one who is in non-participating employment".

The Deputy-Chairman (Major Sir William Anstruther-Gray): With this Amendment can be taken the Amendments to the Third Schedule, in page 67, leave out line 23 and insert:

1. Employed persons over the age of eighteen—


(a) men
…
…
…
…
20


(b) women
…
…
…
…
15


and in line 23, leave out " 15 " and insert "20".
There can be a vote if required on the second Amendment to the Third Schedule, as well as to the Amendment which has been moved.

Mr. J. Howard: This Amendment, and others to Clause 17, were drafted by my hon. Friend the Member for Eastleigh (Mr. D. Price), but since, in the words of a popular number from "My Fair Lady", he gets "married in the morning"—I am sure that the Committee will not mind his being absent tonight. He has, therefore, passed that result of his. researches on me.
I refrain from asking my right hon. Friend to accept a subsequent Amendment to delete Clause 17 and to present the deleted Clause to my hon. Friend the Member for Eastleigh as a wedding present. Instead, I will refer to the arguments put forward in favour of eliminating something which we consider to be an unnecessary piece of legislation.
The Clause is regarded as unnecessary because it is a redistribution of income. It gives all taxpayers the same allowance, irrespective of their individual insurance contributions or their own taxable incomes. The contributions made to the graduated scheme are arranged to benefit the lower paid contributors at the expense of the higher paid ones. I am not quarrelling with that, but, in my view, it is inequitable as between one taxpayer and another to reinforce this initial inequity by so arranging the flat tax allowance that a lower paid contributor receives an allowance in excess of his contributions and the higher-paid contributor receives an allowance which is less than his contributions.
The argument advanced by my right hon. Friend in favour of this Clause was that the administrative difficulties in giving the appropriate allowances in coding for those participating in the graduated scheme prevented the normal procedure being followed. I do not accept this argument. At present, there are a large number of companies which operate superannuation schemes which, under the provisions of Section 379 of


the Income Tax Act, 1952, are approved schemes. The Inland Revenue is familiar with the details of these various schemes, and automatically makes the appropriate allowances in coding for P.A.Y.E. In effect, therefore, to delete Clause 17 would be to preserve the status quo. The law as it stands is perfectly adequate to cover the administrative problems arising out of the institution of a national graduated scheme imposed on top of a flat-rate scheme.
If I may return to Section 379 of the Income Tax Act, 1952, and particularly subsection (2), I think that it provides the machinery which is required to deal with this new scheme.

Sir E. Boyle: If my hon. Friend will allow me—I am trying to be helpful to the Committee—may I say that this Amendment raises the question whether there should be flat rates and what the amounts should be. It seems to me that the group of Amendments we are now discussing to a considerable extent overlap the Question "That the Clause stand part of the Bill". Therefore, Sir William, I wonder whether, for the convenience of the Committee, we may have the main debate on these Amendments, and then, if hon. Members in all parts of the Committee are content, there should be only a short debate on the Question "That the Clause stand part of the Bill."

The Deputy-Chairman: I think that that would be for the convenience of the Committee.

Mr. Howard: I will say nothing more about the deletion of the Clause, and I made reference to its deletion only because that explains why this Amendment was put down.
The purpose of the Amendment is to put before the Committee a saver in case we are unable to delete the Clause by the later Amendment. We can see no justification for an increased allowance for those contracting out of the scheme. We should prefer them to be dealt with by existing legislation. Therefore, the effect of the Amendment would be to take out from the provisions of the Clause those who are in non-participating employment, that is, those who have contracted out of the graduated scheme. If that Amendment were accepted, clearly some further legislation

would have to be introduced to cover those people who had contracted out and were making contributions to a private scheme.
If hon. Members refer to the Amendment to the Third Schedule, they will see that we have put down certain modifications to the allowances for contributions under the scheme in case our Amendment to delete the Clause is unsuccessful. The Committee will see that we have sought to make the allowances for men and women over the age of 18 £20 and £15 respectively. If we accept the principle in Clause 17—and I hope that I have made it clear that I do not accept it—the scale of allowances in the Schedule is wrong mathematically. According to the Ministry of Labour Gazette, in February, 1960, the average earnings for male adult manual workers in October, 1959, were £13 10s. 9d. a week. If we apply an arithmetical calculation to those figures we see that the allowance which should be granted under Clause 17 for men should be £19 and not £15 as in the Schedule. If we make an allowance for all salaried staff, whose average earnings are higher than £13 10s. 9d., we arrive at a figure of £20, which I do not think is excessive.
Under the Clause female workers are to receive the same allowance as male workers. Under existing legislation females receive an allowance of £11 whereas males receive an allowance of £13. The average earnings of female workers over the age of 18 in October, 1959, was £7 a week. I therefore contend that there should be a differential in the scale of allowances between men and women in recognition of the higher contributions which men make to the graduated scheme. I do not regard the figures in the Amendment as sacrosanct, and if the principle were accepted I should not feel tied to those figures.

Mr. Graham Page: I should like to support my hon. Friend the Member for Southampton, Test (Mr. J. Howard) in both the Amendments which he has put before the Committee. My right hon. Friend the Chancellor justified this Clause on Second Reading by saying that it dealt with graduated contributions. He said:
Clause 17 meets the situation which will be created when the graduated contributions begin to be payable … These graduated


contributions could not be handled under the pay-as-you-earn procedure without grave risk of the machine breaking down."—[OFFICIAL REPORT, 3rd May, 1960; Vol. 622, c. 891.]
But this Clause goes further than dealing with the graduated contributions, because it applies to a contributor of any description and it therefore applies to those who contract out of the scheme. A flat rate is applied throughout, with the result that, if we take the figure in the Schedule of £15, the man who contracts out of the scheme is receiving a gratuitous £2, for he is receiving an allowance of £15 instead of £13.
I cannot see how it can be justified as an application to all and sundry when my right hon. Friend justified it on the basis of the graduated scheme. It is the intention of the Amendment in page 10, line 23, if the flat rate is accepted, to apply it merely to those within the graduated scheme. If we are applying it to them and trying to apply it fairly, it is surely right, as my hon. Friend said, that we should take into consideration the different contributions which the male and female make and try to make some such adjustment as the Amendment suggests. It is an increase to the figure of £20 for the male, leaving the figure of £15 for the female.
I dislike the Clause. I hate the justification of administrative convenience which brings inequality and unfairness amongst taxpayers. However, if the Clause has to be accepted, as at this stage in moving the Amendment one must accept it. we should try to make it as fair and reasonable as possible as between taxpayers.

9.0 p.m.

Mr. Houghton: I am sorry that we cannot support the Amendment moved by the hon. Member for Southampton, Test (Mr. J. Howard) or the remarks of the hon. Member for Crosby (Mr. Graham Page). We doubt whether the standard relief proposed is adequate, but we agree with the general principle of a scale of flat-rate allowances.
This is a very complicated matter indeed. I go further and say that, unless the Committee deals with it realistically, it will be a positive shambles of administration. That is not an exaggeration. It will. I beg the Committee to save millions of taxpayers from the most irritating adjustments of their tax liabilities which will be necesary after the conclu-

sion of the tax year, unless we adopt some scheme of standard reliefs of this kind.

Mr. Graham Page: Mr. Graham Page rose—

Mr. Houghton: This is so complicated that, if I am put off, I, too, shall get into a muddle.
I must point out to the hon. Member for Southampton, Test that the contribution of the person who is contracted in may be no higher, and indeed can be lower, than the contribution of the person who is contracted out. Therefore, if a higher relief is to be given for all who are contracted in, it may mean that some will get a higher relief for a lower contribution than is given to those contracted out for a higher contribution. That would make unfairness worse confounded.
What is not generally understood in connection with the graduated scheme is that those who are contracted out will continue to pay the existing flat-rate contributions, whereas those who are contracted in will enjoy the benefit of a reduction in the flat-rate contribution upon which will be built the graduated contribution. A man earning £9 a week in a non-participating employment will pay a higher flat-rate contribution for his existing benefits than a man in a participating employment will pay on the same rate of pay in the graduated scheme.
It is an extraordinary situation. It will have to be explained to many millions of puzzled workers in the months ahead. That is why I have tried to learn it myself in readiness. Certain National Insurance benefits were exempted from tax, for administrative reasons. When sickness benefit was excluded from tax liability, the Chancellor of the Exchequer of the day naturally made a corresponding adjustment in the amount of the contribution which should qualify for tax relief. Therefore, not all the contribution qualifies for tax relief. A man now paying £26 a year in contributions receives tax relief on £13. If he is contracted into the new scheme, his flat-rate contribution will be reduced to £21 10s. and he will be given tax relief on £15 under the proposals in the Clause as it stands.
Therefore, for a lower contribution he will get a higher relief. That is


inevitable if a system of flat-rate allowances is to be given under the new scheme. The maximum graduated contribution, in all, will be £35 a year, and relief will be given on £15. For a woman, the maximum will be £32 10s., because she enjoys the lower flat-rate contribution, and she, too, will receive relief on £15.
The Committee has to consider whether this rough justice will really make the administration of the scheme practicable from the point of view of both the Inland Revenue and the taxpayer; and, if so, whether it is justified, rather than face the alternative that I have described, which is positively frightening in its dimensions and in its difficulties.
The next question is whether there should be any differentiation. Even if we have a flat-rate allowance, should there be a differentiation between those who are contracted out and those who go into the graduated scheme? Part of the difficulty about that is that in the process of assessment of tax the Inland Revenue will not know whether a person is in the new scheme or is not in it, and as far as I can tell there will be no means of the Inland Revenue being notified in every case of a person being in the new scheme or out of it. If that were to be part of the administration, it would be an additional complication, and an additional administrative burden.
This, perhaps, sounds rather like an Inland Revenue speech, and I am probably saving the Financial Secretary a great deal of trouble. I claim, however, to be rather close to the administrative side of the problem, and I think that it would be remiss of me if I did not give the Committee the benefit of that experience and knowledge in this connection. I do so in quite a disinterested way. I am thinking of what taxpayers will feel if they encounter this business of adjusting their tax liability after they thought it had all been dealt with.
As I said before, The Times newspaper has said that:
This monstrosity should be firmly rejected.
Nevertheless, I am in favour of more flat-rate allowances for tax relief. I am in favour of rougher justice in tax reliefs, because I believe that it would mean easier administration and would

obviate a good deal of marginal difficulty —and quite a lot of marginal avoidance.
If only taxpayers would accept that as a basis for future review of much in our Income Tax code, I am sure that there would be a good deal less discontent with the operation of the tax code at the present time. I am sure that I am right about that, and that taxpayers will come to understand that, not only in this connection but in others, too.
After all, we do it already in connection with matters that we have discussed in previous Clauses. One may have an economical housekeeper or an extravagant one; our dependent relative may be more costly to maintain than the dependent relative of a friend, but there are flat-rate allowances, standard reliefs for given conditions, and we do not inquire into the details of expenditure of the taxpayer. It would be impossible to administer the code on such a basis.
Therefore, rough justice is accepted in the whole scale of personal reliefs at the present time. Why, then, get into a "tiz" when there is any suggestion of flat-rate allowance where there is actual monetary expenditure? The principle is the same, whether the money is spent on a housekeeper or on National Health Insurance contributions, graduated or otherwise.
This, therefore, is right in principle, and I defy The Times or anyone in this Committee to call it a monstrosity. It is the only way that will make sense of the scheme. If the Committee does not accept it, it will be doing a disservice to millions of taxpayers, who will have plenty of other worries in connection with the new scheme, and plenty of difficulties. Let us have their tax reliefs settled when their coding is determined and see them through the year without any further complications.

Sir Spencer Summers: I have considerable sympathy with what the hon. Member for Sowerby (Mr. Houghton) referred to as the need to consider administrative convenience. He went on to say that he was in favour of rougher justice. One of the Amendments has behind it the objection to treating men as women. This is rather rougher justice than I am prepared to accept.
The hon. Gentleman argued against the first Amendment on the ground that


it was reasonable to treat alike a £9-a-week man who was contracted out and a £9-a-week man who was contracted in. His analogy was surely quite hypothetical because, in fact, nobody will contract out a £9-a-week man because he would suffer as a result. I do not think that that argument can be valid.

Mr. Houghton: In a number of cases the whole vocation is being contracted out. The Civil Service is an example of that. The whole of the permanent Civil Service, irrespective of pay, is being contracted out, and the whole vocation goes, including the £9-a-week man.

Sir S. Summers: If there are any civil servants receiving £9 a week, no doubt the hon. Gentleman will show me where to find them. That is not a very good example in support of the case he puts.
Having regard to the disparity of earnings between men and women and having regard to the disparity between the contributions they will make, I ask my hon. Friend to look very seriously at that aspect of the matter. It does not violate the principle of a flat rate in the sense of treating all people more or less alike, and it would introduce that element of distinction which the facts warrant. I hope my hon. Friend will consider very seriously that particular Amendment.

Mr. McKay: I disagree with the whole principle embodied in the National Insurance Acts relating to tax allowances because of the invidious distinctions it creates between one contributor and another. As regards the £15 and £20, I think that the £20 goes far beyond what is reasonable. The £15 is much more reasonable, taken in conjunction with the financial position postulated.
I understand the reason for tax allowances in the National Insurance Scheme to be this. When a man is paying for a pension, he is paying for something which he does not receive at that time of life. He has to wait for it until he is a very old man. For that reason, there is special tax relief.
I have in the past tried to show the invidious effect of this on the lower-paid man who has bean paying a level rate of contribution because either he has not been paying any tax or only at a very low rate, with consequent inequality in

insurance contributions. After all is said and done, this allowance is largely based on the amount of money paid for pension. How can one equate in any way the position between those paying tax in the various bands of taxation between 1s. 9d. and 7s. 9d., or the Surtax payer? It is said that tax reliefs should be related to the amount of tax that one pays and it is also asked how it could be done otherwise.
9.15 p.m.
Let me take the case of a man earning £400 with a £15 adjustment in respect of the payment of contribution. A married man would pay tax on £60 at the 1s. 9d. rate. According to information supplied yesterday, a man paying 1s. 9d. gets tax relief of £1 6s. 3d. in the year. How can it be adjusted so that the man with the lowest wage and taxed to the extent of £5 5s. gets a tax relief approximating in proportion to that which the man who pays 7s. 9d. receives? He is paying for the same purpose. One gets £1 6s. 3d. and the man paying 7s. 9d. gets £5 16s. 3d. tax relief on his National Insurance contribution. The Surtax payer who pays 12s. 3d. in the £ gets a 3s. 6d. tax reduction on his week's contribution.
It is said that the position of the man earning £400 cannot be adjusted because he has a different rate of taxation. It is not necessary that one should work on that basis. Why should the man earning £400 get a tax relief of only £1 6s. 3d.? The man on the 1s. 9d. band pays £5 5s. in taxation. There should be more equity between the position of the man with only £1 6s. 3d. relief and that of the man paying 7s. 9d. who gets £5 16s. 3d. in tax relief. He has paid for the same purpose, but merely because he is in a different band of taxation and the matter is regulated yearly he cannot get a proportionate relief. The £400 per year married man taxed £5 5s. should get £5 5s. tax relief at least when others get more for the same contribution. That is one of the weaknesses of the insurance scheme and the tax reliefs that operate. In the case of the man receiving £15 to £20 a week the position is worse. If we were beginning a national insurance scheme with the knowledge that we have today we would not support a scheme in which these invidious distinctions operate.

Mr. Chapman: Would it not be the case that if this applied to National Insurance contributions it would apply to all sorts of other reliefs and we would have to allow a man paying very low taxation to have relief at 7s. 9d. in the £ on his child and marriage allowances? He would become entitled to more reliefs than he paid in tax.

Mr. McKay: My hon. Friend is complicating the matter because he is not in favour of what I am saying. This is a very simple plan which I think, if it were examined thoroughly, would convince anyone that the position is not fair. Even under the present scheme, with a little change the Treasury could regulate it so that the man paying £5 a year would not have a tax relief of only £1 6s. 3d. but at least as much relief in tax as the man paying at the rate of 7s. 9d.
What is the effect on the insurance scheme? Does it help the Exchequer? Not a bit. It is putting an extra burden on the Treasury. About two months ago, the Answer was given in reply to a Question that the employers are given a tax relief of £143 million in a year. In addition, the Treasury is paying about £40 million for insured persons. In other words, the Exchequer is doubly penalised under this scheme. If we were starting the scheme afresh, would we do it on the same lines as it is done now? We would not have a poorer section of our community paying the same contributions for the benefits included in the scheme and getting less relief. Surely there is something wrong about that. On a basis of fairness, how could we institute a system whereby the highly paid people would get their benefits for about half the amount of money paid by the lower income earners? I do not think that such a method could be agreed to if it were discussed before starting the national scheme.
If we go into the scheme properly, realise the amount of money that the Exchequer has to pay, the invidious distinctions that result and the changes that could be made if the Exchequer and even the insured person paid the same amount of money, I am satisfied that there are ways and means of rearranging the national scheme and doing away with these tax reliefs, if not entirely, at least in some respects,

and get better benefits for the same total money.
When we examine the scheme financially, I cannot see how it can be declared to be right. Some people might say that if a method like this is introduced into the National Insurance scheme, whatever principle is adopted must be applied to all the other tax arrangements. That by no means follows. It does not follow that because one category is exempted, everybody must be exempted. The taxation system can be regulated in any number of ways to meet particular instances of unfairness.
I know that the subject is a peculiarly difficult one to deal with properly. At the same time, I am satisfied that there are ways and means of dealing with the whole problem and of rearranging the contributions and the tax reliefs in such a way that better benefits could be paid and the cost to the Treasury would be no greater than it is now. I simply wanted to put on record my objections to the whole system of tax reliefs in the national social scheme. It is entirely wrong in principle.

Sir Henry d'Avigdor-Goldsmid: All Members of the Committee will be grateful to the hon. Member for Wallsend (Mr. McKay), because the Clause is a complicated one and needs attention. It has got by with almost the minimum of discussion. The main argument in its favour was the one put forward by the hon. Member for Sowerby (Mr. Houghton), who knows the subject extremely well, in which he said that without the Clause something like chaos would be produced in the Inland Revenue offices. My hon. Friend the Financial Secretary was so excited that he bounced up and down in his seat to confirm the accuracy of the hon. Member's opinion.
These two experts, who know so much about the subject, have been bouncing up and down at each other confirming the chaos that would result if we tried to give people the tax allowances that were due on the premiums they have paid. As justification for not doing so, the hon. Member for Sowerby described the Government's proposal as rough justice. When he used those two words, a ripple of applause went along the


benches opposite. Rough justice is what they want. [Interruption.] The hon. Member for Birmingham, Northfield (Mr. Chapman) may well deny it. I do not know whether he was awake at the time. Certainly, applause greeted that demand for rough justice. What is rough justice in taxation? Surely, it is injustice. There is no such thing as rough justice. Either there is justice or there is injustice. Rough justice is not justice.
I am quite unable to understand how the Inland Revenue can make sense of a situation when the two experts on the subject, the hon. Member for Sowerby and my hon. Friend the Financial Secretary, both agree that they cannot make sense of it. Therefore, the corollary seems to be that the Inland Revenue cannot make sense out of the situation. The taxpayer must have justice, and the only way in which justice can be done is to give an allowance in line with the maximum allowance to which he can be entitled.
9.30 p.m.
If we take that line, then the Inland Revenue is having to pay for the fact that it is not able to make sense out of the situation, and revenue is being lost, If the allowance had been raised to the £20 suggested, then in a year or so the Inland Revenue would have found that the problem was not so difficult and a graduated scale could have been introduced. That is supposition, but I say quite firmly that we are not here to administer rough justice but to administer justice to the taxpayer. He has nobody else to defend his interests and we should ask the Government to look at this to see if they can administer this in another way. They should undoubtedly grant the highest allowance suggested in these Amendments, namely £20.

Mr. Mitchison: I hope not to take up the time of the Committee, but there is one cogent argument in favour of the Clause which has not been mentioned, and that is that both sides of the industry, the British Employers' Confederation and the Trades Union Congress, have studied it and have agreed to it. In a democratic universe—or should I say a democratic country, since we had better be careful about the limits of it?—that is a very strong argument in a case like this.
I listened to the speech of the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) and I was not quite clear what he wanted. He said that he wanted justice. Justice appears to involve the withdrawal of the scheme but what he was to put into its place was not clear. At one moment it was that the taxpayer should have the maximum. Whether or not under the present arrangements or in a theoretical adaptation of them, he would get that or a great deal less. That is not justice. It is no doubt giving the taxpayer the maximum but it is no more—

Sir H. d'Avigdor-Goldsmid: Unlike his hon. Friend the Member for Sowerby (Mr. Houghton), the hon. and learned Member for Kettering (Mr. Mitchison) was not on the Committee which dealt with the National Insurance Act, when much of the argument by the hon. Member for Sowerby was devoted to the plight of the insured person under the scheme who was earning £15 or more. I feel that a little of the same argument might be devoted to him now, as he appears in a different capacity as a taxpayer.

Mr. Mitchison: I was not on that Committee, but I am tolerably well acquainted with what it did and said, and I remain completely uncertain as to what the hon. Member for Walsall, South wants. But I shall not take up more time on that.
In speaking on this matter in his Budget speech, the Chancellor said:
… the only practicable solution is to have a flat-rate allowance for all adult employees. This will mean that some employee will get relief on slightly more than they pay, and others on slightly less.
The amount of the normal allowance which I propose is £15. This is somewhat above a true average."—[OFFICIAL REPORT, 4th April. 1960; Vol. 621, c. 60.]
What is the true average and how is it worked out? If one looks at the table in the Schedule, there is in the subsequent figures a distinction between men and women, but the Chancellor has told us that the only practicable solution is to have a flat-rate allowance for all adult employees—that is to say, both for men and for women. I do not understand why that should be possible in some cases and not possible in others.
In the Financial statement there appears an item of £11 million as being the cost


of this Clause. That was not mentioned by the Chancellor in his Budget speech— at any rate it is not in HANSARD—

Mr. Amory: indicated assent.

Mr. Mitchison: —nor, I think, was it mentioned when the Bill was being introduced by him. Perhaps we could be told how the £11 million comes in. Is it the difference represented by somewhat above a true average? If so, perhaps the Financial Secretary could give us some idea of the total amount involved. I think that he has the sense of what I am asking. There are really two questions—one as between men and women and the other about the true average and the percentage.

Sir E. Boyle: I should prefer to write to the hon. and learned Member about how the computations are made, but I can give him the figures this evening.

Mr. Mitchison: All I want to know about the computations is why they have to be made on both sexes whereas some of the figures appear to relate to the sexes separately.
As to the Amendments, we found the right hon. Gentleman's remarks a little puzzling in the light of the sum mentioned in the Financial Statement. We did not quite know how to work it out. We felt that the £15 looked too small for the sort of reason that was indicated by the hon. Member for Southampton, Test (Mr. J. Howard). We still think that it looks too small, but if we are told that it is not, that there is good reason for it and that it is about the true average we might look differently on the matter. Therefore, we would prefer not to indicate our attitude to the last two Amendments until we have heard what is to be said on the Government side. We do not agree on the first Amendment and I respectfully adopt all the comments made by my hon. Friend the Member for Sowerby (Mr. Houghton) about the undesirability, from the taxpayers' point of view, as well as that of the Revenue, of an administrative shambles. It sounds very nasty.

Sir E. Boyle: I should like to assure my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) that, despite my antics on the Front Bench, the seat will be still comfortable for any

successor that I may have. The whole Committee appreciated the contribution of the hon. Member for Sowerby (Mr. Houghton), who managed not only to explain this lucidly but to invest the subject with a degree of enthusiasm which I should not have thought possible. It reminded me of the historian who sought in a pamphlet to distinguish between the Eucharistic doctrine of Luther, Calvin and Zwingli and not only succeeded in doing so but seemed to suggest that that was the one historical problem that mattered.
I should like not only to tell the Committee why the Government felt bound to adopt this principle but also to explain how all this arose. I agree that this is an extremely difficult matter. This is one of the most difficult Clauses in the Finance Bill. I wish that the subject were as simple and straightforward as the Editor of The Times made it out to be.
The reasons for introducing a flat-rate allowance are these. As hon. Members will be aware, under the existing law— Section 377 of the Finance Act, 1952— a deduction is due for so much of the National Insurance contribution as does not relate to unemployment benefit, sickness benefit or maternity benefit. The reason for that is that contributions which are paid to secure taxable benefits are admissible as a deduction in computing income for tax purposes. The true application of this principle to the new graduated insurance scheme would involve giving tax relief for the whole of the graduated contributions paid by the employee for part of the flat-rate or minimum contribution which goes towards taxation benefits.
The difficulty in giving a tax allowance on graduated contributions under the new scheme in the P.A.Y.E. coding in the same way as is done for existing allowances, is that it will not be possible in many cases to estimate in advance just how much graduated contribution an employee will pay in a tax year. When the P.A.Y.E. code number is being determined before the beginning of each tax year, the latest information which is available to tax inspectors about earnings relates to the tax year ending in the previous April; but earnings may very well fluctuate so much in the course of the succeeding two years


that any estimates based on this figure would be wrong, and in that case the allowance would have to be adjusted by making an assessment after the end of the tax year. The probability is that the graduated insurance scheme would involve making so many assessments at the end of the year that the P.A.Y.E. machine would be in grave danger of breaking down completely.
That is the problem which we have to face, and I can tell the Committee that, very soon after coming to my present office, I had a talk on the alternative with the British Employers' Confederation. As a matter of fact, this subject had already been discussed at official level both with the Trades Union Congress and the British Employers' Confederation, and they were asked in confidence for their views on this possibility. I later discussed the subject myself with representatives of the British Employers' Confederation, and the Confederation objected very strongly to the extra work that would be thrown on employers by a proposal not to have a flat-rate scheme.
This is a difficult subject, and I would point out to my hon. Friends that there is no desire in the Treasury for rough justice for its own sake. I think that the hon. Gentleman enjoyed that part of his speech very much and so did we, but I assure him that there is no question of anyone wanting rough justice for its own sake.
The point is twofold. British employers will have an extremely difficult task with the new graduated insurance scheme. It will give them a great deal of extra work, and they represented to me—and I could not help feeling that this was a fair point—that any new P.A.Y.E. scheme of the sort that would be involved if we did not have a flat-rate scheme would be not merely different in degree but different in kind from anything they had had before. It would be a completely new kind of exercise, and I do not believe it is realistic to suppose that this Committee would impose such a duty on the employers of this country at a time when the new graduated insurance scheme was coming into operation and when they would have a great deal of work to do.

Mr. Graham Page: The hon. Gentleman said that it was a new exercise, but

is not this exercise done already under Section 329 for superannuation schemes?

Sir E. Boyle: I am glad that my hon. Friend has raised that point because I know that my hon. Friend the Member for Eastleigh (Mr. D. Price) whom we all wish well tomorrow, has raised the same point.
The operations are very different indeed both in kind and scale, because contributions to a superannuation fund do not vary with weekly or monthly fluctuations, but are a known percentage of the year's earnings. Since membership of these schemes tends to cover workers whose earnings are comparatively stable, it is not too difficult to estimate in advance what the contribution will be. A further point is that superannuation funds still cover only a minor part of the employed population, whereas graduated contributions, at least in some weeks or months, will be paid by the majority of employees who are not contracted out of the scheme. I do not think that the two things are comparable.
I do not think that I need deal at length with the persons within the graduated scheme, but, in answer to my hon. Friend I should like to say something about what are called non-contributing or contracting-out employments, because that is the kernel of the Amendment. It is true that the flat-rate proposal is slightly generous to those who are contracting out of the graduated scheme, because they will receive a £15 allowance. They would be paying the same contribution at present for which an allowance of £13 is given to a man and £11 to a woman. They are thus receiving some benefit from a flat-rate allowance which pays some regard to graduated contributions which they do not themselves pay.
9.45 p.m.
The idea that there should be different allowances for employees participating in graduated schemes as compared with those applicable to contracted-out employees had some attractions in theory, and my right hon. Friend considered it. But if a different allowance were given to contracted-out employees it would be necessary to revise the P.A.Y.E. code numbers, and any change from contracted-in to contracted-out employment, or vice versa, would be an extremely big job. In many cases there would have to be adjustments in the taxpayer's liability


after the end of the year. It was largely the necessity for avoiding end-of-the-year adjustments that led to the decision to give a flat-rate allowance for graduated contributions. The work of re-coding and making end-of-the-year adjustments would be less than the work of giving graduated reliefs generally, but it would be appreciable, and at a time when the Inland Revenue authorities and the employers are having a good deal of extra work we do not want to indulge in an exercise unless we feel it is really worth while.
My right hon. Friend believed that in making this approach the extra work involved would be largely wasted, because the distinction in the amount of the allowance would not in practice be reflected in the amount of tax deducted under P.A.Y.E. The P.A.Y.E. system is not geared accurately to reflect variations of this small order. I think that the hon. Member for Sowerby made that point. The distinction between the £13 allowance for contracted-out employees and the £15 allowance for non-contracted-out employees might produce no difference in the tax deducted, or it might produce a difference greater than the amount of tax on the £2.
There is the further point that to make a distinction between contracted-out and other employees would produce another anomaly. A contracted-out employee would get less relief than a non-contracted-out employee, notwithstanding the fact that the former might be paying a bigger contribution. The contracted-out man would get £13 in relief, the allowable part of his contribution being £13, whereas the non-contracted-out employee would get £15 in relief, even though the allowable part of his contribution might be as low as £10, because his wages were too low to make him liable to graduated contributions.
I am sorry to have to deal with such an extremely complex subject in this way, but I can assure the Committee that we have looked at it very carefully. Quite apart from the extra work involved, we do not believe that in practice it would be worth while making an exception of contracted-out men, partly because the fine distinction in the amount of the allowance could not be reflected in the amount of tax deducted under P.A.Y.E.

and also because, having done all this work, and put this extra work on employers, the total effect might be merely to produce a fresh anomaly.
Having decided that there was no alternative to a flat-rate scheme, the question arose of what the flat-rate deduction should be. Here I want to answer one or two questions raised by the hon. and learned Member for Kettering (Mr. Mitchison). The average figure we have taken is £13 for a man and £12 for a woman. A flat-rate allowance of £15 will cost the Exchequer £79 million in a full year, which is £11 million more than the "true" relief of £68 million. That is the difference in the cost to the Exchequer. If we had a flat-rate deduction of £20 it would cost the Exchequer £25 million more. My right hon. Friend felt that even though there would be advantages, and slightly greater fairness with a flat-rate deduction of £20, or a higher figure than £15, we had to consider the Exchequer liability, and a sum of £25 million is much more than my right hon. Friend feels we could afford in present circumstances.
I will give a few examples of the effect of the £15 allowance. Of course it is inevitable with a flat-rate allowance costing approximately the same as the "true" relief, that employees in the lower income range will receive relief on slightly more than they pay, while those in the higher range will have relief on slightly less than they pay. But I assure the Committee that the maximum losses to individuals will be pretty small. So far as Income Tax is concerned, the greatest loss is that incurred by a single person with an investment income of £24 or above who would have had relief under the present law for his actual contributions without restriction of his earned income relief. He will lose £3 9s. 9d. a year if he pays the maximum contribution on earnings of £15 a week or more. That is approximately 1s. 4d. a week, and I do not think that one can say that a maximum possible loss of 1s. 4d. a week on an income of £15 a week in the case of a single person —although it is not ideal—could be described as very severe.
A married man with three children under 12 and with £24 investment income will lose only £1 18s. 3d. a year. An employee with no investment income whose earned income relief under the


present system is restricted by deduction for National Insurance contributions will lose considerably less. A married man with three children under 12 will only lose 5s. 3d. a year.
The hon. Member for Southampton, Test (Mr. J. Howard) asked whether there should be a higher figure for men than for women, £20 for men and £15 for women. I do not believe that would work out very happily. It would save only £3 million altogether, so that the cost to the Exchequer would remain pretty high. If the flat-rate allowance of £15 were increased the increase would have to apply to men and women alike, in my view. The maximum allowable contribution for men would be £24 and for women £22. I think it would be difficult to justify increasing the rate for men to £20 and leaving the rate for women at £15, since it would lead to the result that a woman paying £22 allowable contribution would receive less relief than a man paying £10. We should get again into the position that in trying to achieve equity in one way, we should create new anomalies between some men and some women; and if the Committee voted for anything like that we should soon find considerable pressure for the removal of such anomalies.
I apologise for speaking at some length, but this is an extremely difficult subject. After giving it full attention we are sure that there is no alternative to a flat-rate scheme. I do not say that the figure of £15 is ideal, but this figure will cost the Exchequer £11 million. When one contemplates the very small losses which will be incurred as a result of a flat-rate figure of £15 I do not believe that it will be considered unreasonable, and I ask the Committee to accept the proposals of the Government.

Mr. Kenneth Lewis: In view of the fact that the hon. Member for Eastleigh (Mr. D. Price) has put his name to this Amendment and in view of the fact that after tomorrow he will be engaged in participating employment, I wonder whether my hon. Friend the Financial Secretary could have a word with him when he returns to see whether he can give him any hope for the future for this Amendment?

Mr. J. Enoch Powell: Despite the detailed reply

of my hon. Friend the Financial Secretary and the whirlwind eloquence of the hon. Member for Sowerby (Mr. Houghton), who was in his element this evening, I wish to ask my right hon. Friend to address his mind once again to the necessity for this proposal before this Clause finally passes into law.
There is, of course, precedent for the device of an average rate of tax. We have it in relation to dividends paid by building societies. We have it in relation to the repayment of pension contributions when an employee gets them back upon leaving a scheme. Nevertheless, it is something which we ought not to introduce into the tax law without very clear and certain necessity, for it involves undoubted injustice. In this case, as my hon. Friend did not conceal, it means that large numbers of people will receive allowances for more than they are contributing under the insurance scheme and—what is more important—large numbers of people will receive less by way of allowance than they are obliged to contribute. Indeed, in the extreme case, although it is a case which will cover, I should imagine, millions of people, I believe there will be as much as £9 excess of the compulsory contribution over the amount which is allowed for tax.
I ask my right hon. Friend not to under-estimate either the significance of so apparently small an allowance upon an income of £750, or the irritation and sense of injustice which an anomaly of this sort can create. I submit that there is no real analogy with the flat rate allowances of a quite different kind which the hon. Member for Sowerby mentioned. There is no real analogy between what we are doing here and, for example, the flat rate allowance of £75 for a housekeeper. We are here concerned with the case where under the general law a man is entitled to have allowed the actual amount which he pays by way of premium—and he is here paying it, once he is in the scheme, compulsorily—in regard to a future pension.
Even at this stage I remain not entirely convinced that it is either impossible to separate those contracting out from those remaining in, or, whether by way of P.A.Y.E. or of subsequent adjustment, to ensure that people receive


the actual allowances to which they are entitled in virtue of the sums which they have contributed.
There is, however, not only this consideration of the undesirability of giving people avoidably unfair tax treatment. Another consideration, which has not been mentioned this evening, and which is of some importance, is that it was the intention of Parliament that those concerned should choose freely whether they would be inside or outside the new graduated scheme. They were, of course, to weigh in their own circumstances the alternative merits and benefits of being inside or outside; but what we are doing here is inevitably to introduce an unintended fiscal weighting of the scales in one direction or the other. For the man who is earning £12 a week and upwards it will undoubtedly be a consideration that if he is in the scheme he will not get tax relief for the amount of contribution which he actually has to pay. I am sure it was not anyone's intention that there should be this fiscal weight placed into the scale of that free decision.
Therefore, while recognising the care with which this matter has been treated, I suggest to the Committee that it is an important one. The Tightness or wrongness of the decision we take on this matter may long be felt, and will be a matter which comes home to hundreds of thousands of people in their tax experience. I hope my right hon. Friend will once again address his mind to this matter before it is finally decided.

10.0 p.m.

Mr. Mitchison: We venerate, but do not share, the purism of the hon. Member for Wolverhampton, South-West (Mr. Powell), and, in view of the agreement between the principal parties concerned, we accept the explanation that was given by the Economic Secretary to the Treasury as regards the figures and the average.

Mr. Amory: I should like to emphasise what my hon. Friend the Financial Secretary to the Treasury said—that we ourselves are not enthusiastic about this scheme, because of its admitted imperfections. I should like to repeat that we started with a very strong desire to have a more exact system. We had discus-

sions on several occasions with representatives of industry about this, and we wanted to find an accurate way of reflecting the exact contributions from the point of view of tax allowance, but we had to admit that we could not find a practicable scheme.
In regard to those who contract out, I should like to remind my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) of a fact of which I am sure he is aware. So far as one can see, there will be quite a large number of people who will be going in and out of the graduated scheme. This is not a question of a once-and-for-all movement, and that introduces very great administrative difficulties. I can only repeat that at present, in our best judgment, there is not a practical alternative to this proposal. I admit its imperfections, but I hope that hon. Members will bear in mind what the Financial Secretary said—that, as far as P.A.Y.E. is concerned, there are inherent in that scheme a number of imperfections, some of them making a good deal more difference than this proposal does.
Having said that, pursuing the thoughts of my hon. Friend the Member for Wolverhampton, South-West, I certainly say that we will continue to study this, and, if and when we can find any other alternative, at whatever stage of the proceedings, I shall come to the Committee with great gratification to say that we had found one, but I should be deluding the Committee if I said that I thought that at present there was an alternative within sight.

Mr. J. Howard: In view of my right hon. Friend's reference to the imperfections concerned, and of the assurance that he will study the matter further, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Mitchison: I beg to move, in page 12, line 13, at the end, to insert:
(7) This section shall apply in relation to contributors under arrangements made by virtue of section sixty-three (arrangements with Northern Ireland for unified system) or under provision made by virtue of section sixty-four (reciprocal agreements with Dominions, Colonies and foreign countries) of the National Insurance Act, 1946, as it applies


in relation to contributors by virtue of other sections of that Act:
Provided that—

(a) nothing in this subsection shall entitle any person to more than one deduction under this section;
(b) the amounts for relief specified in the Third Schedule to this Act and Part 11 of that Schedule shall not apply to persons claiming by virtue of this subsection; and
(c) the Commissioners of Inland Revenue may from time to time make regulations—

(i) specifying the amounts for relief appropriate to such persons as last mentioned, regard being had to the relevant arrangements or provision under the said sections sixty-three and sixty-four and the amounts being such as not to exceed the amounts which would have been appropriate for similar claimants under other subsections of this section, and
(ii) generally for carrying out the provision; of this subsection.



There are two Sections of the National Insurance Act which provide for arrangements, in the one case with Northern Ireland and in the other with Dominions, Colonies and foreign countries, for reciprocation as between the insurance schemes of this country and the other countries concerned. These are carried out by Orders, which are tolerably numerous and pretty complicated.
Perhaps at this hour of the night, it would be sufficient, in dealing with them at this stage, if I said that I have looked carefully through one of the reciprocal Orders, the one with Norway. It seemed to me that there were circumstances in which, possibly, a national of this country would, on the one hand, be liable for Income Tax in this country, and, on the other hand, would not be liable to make a contribution to our National Insurance Scheme but would make a contribution to the Norwegian national insurance scheme. If I give the instance, I hope the Committee will be grateful if I do not read out the lengthy and rather complicated Order.
One instance is where a British national, resident in this country, is employed by a Norwegian whaler or by the English branch of a Norwegian company. That is one case, and another is that in which a British national serving on a Norwegian ship under a whaling contract may be liable, as I understand it, to pay Income Tax in this country but to contribute to some special

arrangement about the pensions of whalers in Norway and not to the British insurance scheme.
If the Government are prepared to say that there is no case in which a person can be liable for British Income Tax and also be liable for foreign but not British insurance contributions, obviously there is nothing in the Amendment but, speaking for myself, I should require some convincing of that, because I think there are cases, although no doubt they are not numerous.
If there are such cases, I fully appreciate the difficulty of dealing with the past. I believe I am right in saying that in those cases there has been no Income Tax concession corresponding to that made by the Income Tax Acts which the Economic Secretary mentioned and which relates to part of the National Insurance contribution. But if there is to be a flat-rate contribution, it has at any rate the advantage, I suggest, that we can remedy what is an injustice, because it is not right that anyone should be entitled to make deductions in this country against British tax in respect of contributions to our insurance system while he should not be entitled to do so in respect of an insurance system to which he is just as liable to contribute as to the English system and from which he will draw benefits broadly corresponding to those of the English scheme.
In view of the time and a certain tedium inherent in the Finance Bill, I have tried to put the point as shortly as possible, and I hope that the Government will tell us that they accept the Amendment, because although the cost is small—as I think it would be—and the number of cases is small, there are, or even might be, some cases in question.

Sir E. Boyle: The Committee will be glad to learn that my reply to the Amendment will be much shorter than that to the previous Amendment. The Amendment has two parts. The first deals with Northern Ireland. I can assure the hon. and learned Member for Kettering (Mr. Mitchison) that the reference in the Amendment to Northern Ireland is unnecessary. True, there are in force arrangements with Northern Ireland for a unified insurance system, but no contributor is debarred under the Clause as drafted from relief which he could obtain by virtue of a reference to Section 63 of


the National Insurance Act. Contributions under both the National Insurance Act and the Northern Ireland Act are covered by the Clause as it stands.
The position in respect of Commonwealth and foreign countries is a little more complicated. A number of reciprocal agreements on National Insurance have been entered into under which persons ordinarily resident in the other country who come to work over here for an employer of their own country may keep up their home insurance contributions and be exempted on this account from payment of British Insurance contributions. Since these payments are not made under the National Insurance Act, they do not qualify for relief at present from United Kingdom tax with the exception of a country with which we used to be more familiar in the Committee than we are—the Isle of Man—for the Isle of Man agreement provided a unified system with the British system.
I do not know how many of these cases will arise. So far, it seems that the problem is likely to prove a small one. We have had very few complaints about the tax treatment of these contributions, but I saw one not long ago from the hon. Member for Sowerby about an Austrian resident here who was voluntarily paying contributions to the Austrian scheme. Since there is no reciprocal agreement with Austria, in that case there will be no benefit under the Amendment.
Over twenty reciprocal agreements have been concluded. The insurance schemes in the countries concerned vary considerably. The general principle of United Kingdom tax law is to give relief only for contributions, such as pension contributions, which go to provide taxable benefits. Clearly there would not be justification for allowing a more generous relief to contributors under a foreign scheme. However, there is clearly some theoretical merit in the proposition that an employee from a foreign country, who is working over here and liable to tax on his earnings, should receive some tax relief from contributions compulsorily paid to a foreign insurance scheme, by virtue of which he is exempted from liability to pay British National Insurance contributions.
I do not think that this problem is likely to arise very often, but it is rather a complex problem to which my right hon. Friend may like to pay some attention. I do not think that the hon. and learned Member's Amendment will quite do as it stands, but it is a question which I would very much like to explore. Without making any commitment for the future, I suggest to the hon. and learned Gentleman that I should explore this question with my right hon. Friend and that we should see, at a later stage of the Bill or on some later occasion, whether there is any way of meeting this point. It is a rather serious and complex matter of a limited kind, and I suggest that we might have time to look at it.

Mr. Mitchison: I appreciate the tone of the hon. Gentleman's answer. I must point out one thing to him. He said, perhaps inadvertently, that it is a question of choice. It is not a question of choice. Where certain conditions are fulfilled, the Agreement itself may oblige a British national employed by a foreign resident in this country to contribute to the foreign employer's national insurance scheme and not to the British one. Therefore, there is exactly the type of unfairness which the Financial Secretary indicated he appreciated.
As regards the amounts, I did not mention the Amendment in detail, but it was because of that sort of question that we left it to the Treasury or the Commissioners—I forget which—to make Regulations, subject to their not exceeding the British amounts. Therefore, we left it at large.
The Financial Secretary said at the end of his remarks that he and his right hon. Friend would examine the matter either at a later stage of the Bill or on some other occasion. It may be technically complicated, but it does not involve, I imagine, extensive inquiries. If the Financial Secretary can assure me that he will bring in something on Report, or explain why he cannot bring in something—one or the other—I should be glad to withdraw the Amendment.

Sir E. Boyle: I will certainly undertake either to table an Amendment on Report stage or, if the hon. and learned Gentleman tables an Amendment on Report, to explain more definitely just why we cannot deal with this problem.


While I agree that the actual investigation can he made without too much difficulty, in the sphere of drafting and getting the law right in this respect it may not be altogether an easy matter. I will certainly undertake either to table an Amendment or, if the hon. and learned Gentleman tables an Amendment, to give a more definitive explanation than I have given this evening.

Mr. Mitchison: I deeply regret having to disappoint my hon. Friends, who are acutely conscious of the importance of the matter and where the balance of justice lay, and would no doubt have liked to press it to a Division, but in view of what has been said, I have no alternative but to beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

Third Schedule agreed to.

10.15 p.m.

Mr. Mitchison: I beg to move, That the Chairman do report Progress and ask leave to sit again.
We have got through a number of Clauses, and the next Clause, Clause 18, is obviously an extremely complicated one which has provoked a number of Amendments and will provoke a number of discussions. I hope the Chancellor of the Exchequer will agree that it would be very undesirable to embark on it at this hour of the night, because if we were to press it to a conclusion we should be left hobby farming till the dawn, which I am sure he would not wish.

Mr. Amory: I think we have made fair progress, Sir Gordon, but I thought that it was the wish of both sides that we should get some way through our consideration of the Amendments to Clause 18 before we went home this evening. I rather thought that that was the general wish of the Committee. We have such a tremendous amount of work ahead of us on the Bill that I would have thought it desirable that we tried to make some progress in this direction before reporting Progress.

Mr. Mitchison: It is perfectly true that at an earlier stage we had hoped to get into Clause 18—if I may put it in that way—but we had a very long, a

very full and a very interesting debate on the rates of tax and, quite frankly, speaking from this side of the Committee, we have not made the progress for which we hoped. I suggest to the right hon. Gentleman that it would be rather unsatisfactory now to take one or two of the Amendments to this Clause. They do hang together a good deal, and I think that we should only get ourselves involved in matters that would have to be discussed partly today and partly tomorrow. In the interests of all concerned, I hope that the right hon. Gentleman will relent and lend his support to the Motion.

Mr. Hirst: I should very much like to support the hon. and learned Gentleman the Member for Kettering (Mr. Mitchison). His Motion is absolutely right and proper. Clause 18 is a fundamental Clause and has a very considerable significance about which a large number of hon. Members have a great deal of concern. To start on it at this late hour, when many of us did not expect it to be dealt with, would not, I think, be treating the Committee with that degree of responsibility and respect that we expect from my right hon. Friend. I support the hon. and learned Gentleman's Motion very strongly indeed.

Major W. Hicks Beach: I, too, support the Motion, and if the hon. and learned Member for Kettering (Mr. Mitchison) presses it I shall certainly vote with him. It is quite absurd to proceed further with this present business tonight.

Mr. Mitchison: I apologise to the Committee for saying that we would have to continue the discussion of the Clause tomorrow. If, by any chance, we do start it this evening, we shall be unable to continue our discussion until after the weekend, and it is such a complicated Clause that we might by then have forgotten what we had said about it tonight.

Dr. Denzil Freeth: May I add my plea that we should wait until after the weekend to begin our debates on this very complicated Clause, into which some of us want to go in some detail. I think that late on a Thursday night would really be a rather unfortunate time to start our discussion.

Mr. Harold Wilson: I think it was hoped that we would make a start on Clause 18, which is a very meaty Clause, and that we might have been able to dispose of one or two Amendments, but things have gone a little slower than some of us had imagined. There can be no complaint about that, because the Clauses that we have dealt with have been those that affect personal allowances and the whole mass of the taxpayers.
If I could feel that we could, perhaps, get on to the first Amendment standing in the name of some of my hon. Friends and get through it quickly, that would be one thing, but I know that the feeling about Clause 18 which exists on the opposite of the Committee is such that if we were to make a start on it even our uncontroversial Amendment—as we think it to be—might provoke a certain amount of discussion, and that it would not be for the benefit of the Committee to go on and on with it. It might be better if we had time to look at Clause 18

and start as fresh as I hope we shall be next week. I think that Clause 18 may take quite a time, and I suspect that there will be at least as much talking on it from the benches opposite as from this side of the Committee.

Mr. Amory: I am bound to say that I think it conceivable that the allegedly non-controversial Amendment might take a little time to discuss. I suppose I am suffering from an excess of keenness. I realise that satisfactory progress must be based on good will, and I recognise that we have made a certain amount of useful progress.
In spite of my natural enthusiasm to proceed as rapidly as possible with our business and record the maximum amount of progress, I should not, after hearing the representations which have been made, wish to oppose the Motion.

Question put and agreed to.

Committee report Progress; to sit again Tomorrow.

Orders of the Day — HOSPITALS, MANCHESTER

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Finlay.]

10.22 p.m.

Mr. W. Griffiths: The matters to which I wish to refer tonight arose in the following way. During March this year, a series of articles appeared in the Manchester Evening Chronicle and the writers of those articles included a hospital board member, a family doctor, an obstetrician and a casualty specialist. The writers made charges about serious shortcomings in the operation of the National Health Service in Manchester. Tonight, I shall confine myself to only two of the matters aired in the articles, and perhaps the most convenient thing to do would be to quote from the article with which I am particularly concerned.
This was an article written not by a layman but by a Manchester family doctor. He began by saying:
Jumping the queue in the waiting list for a hospital bed has become a racket. It pricks my own conscience.
He went on to say:
How is the jump-the-queue trick done? A patient is sent, quite properly, to a hospital to see a consultant. Eventually an appointment is obtained. The patient needs hospital treatment and goes on the waiting list for a bed. It may be months before that bed becomes available.
The same patient goes to the family doctor, who knows what is going to happen and what the delay is likely to be. He's in a cleft stick, so he says: ' If you won't mind paying the fee I'll send you to see a consultant privately'. The doctor sends a note to say that the patient is suffering from a certain complaint, and will the consultant do what he can? Within a week that patient is in a hospital bed—a hospital bed provided by the Health Service.
That is the first point.
I apologise for these long quotations, but it is essential to make them to put my case. The second matter concerned the way consultants operate in outpatient clinics. The writer here spoke of sending his patient to see a consultant and he said:
I know who the consultants are. I know the value of the work of the particular man I want—call him Mr. Blank. I send my patient to the hospital to see Mr. Blank, because it is Mr. Blank's opinion I want, no one elses's.

I am sick and tired of getting hospital reports back signed by a hospital registrar per and pro the consultant. It is not the registrar's opinion I want. It is the consultant's. The patient should have the right to get that opinion. That is what the consultant is paid for.
When I read this, I appreciated that it was a matter of concern to myself, to any other public representative and to the people of Manchester. What do these charges amount to? First, it seems that there is a short-cut to the hospital ward via a consultant's private room. Secondly, it would seem that for some reason a patient referred to an out-patient department through the consultant's clinic often does not see the consultant to whom he is sent.
I thought that these were serious matters which should be brought to the Minister's attention. I therefore tabled a series of probing Questions and sent the articles to the Minister in March. I want to make it absolutely clear that I am not making a wholesale attack upon consultants, many of whom I know personally to be dedicated and hardworking men and women. I was therefore a little shocked at the Parliamentary Secretary's Answer. When I asked for information about the number of patients admitted to three of the teaching hospitals in Manchester after having had private consultations with the consultants attached to that hospital, the hon. Lady said,
I regret that this information could not be made available without a disproportionate amount of work by the hospital authorities." —[OFFICIAL REPORT, 9th May, 1960; Vol. 623, c. 14.]
Had I let the matter rest there, that would have been an end of it, but I did not. I said that I thought that that was unsatisfactory, since a little work might do something to remove the smears that lay on the consultants and the expressed dissatisfaction of the patients. The hon. Lady went on to give some reasons why it was difficult to extract the information that I was seeking. However, I hope to indicate how I think that a test could be made to verify the accuracy or otherwise of these charges.
The hon. Lady and the Minister have been extremely kind to me and other hon. Members in the past in obtaining most exhaustive statistics over a wide field. When she refuses to find the


statistical answer to a matter of this kind, it possibly lays her and her Department open to the charge that she has something to conceal by not producing the information, as statistics are so readily available in other spheres.
It is not as though the allegations about queue-jumping were unheard of. Recently the Minister set up an inquiry in Shropshire, which I understand is sitting now, to probe into allegations about queue-jumping or even worse matters in the Shrewsbury area. Therefore, to set up such an inquiry the Minister must have been convinced that prima facie there was a case that should be probed in another part of the country.
As a result of the publicity given to these matters and the articles, I received many disturbing letters from all over the country. I should like to read some extracts. The first is from a general practitioner, who states:
The queue-jumping about which you complain in Manchester"—
in fact, it was not my complaint but that of a general practitioner—
is also prevalent in Sheffield and Rotherham, and a three or five guinea fee paid privately to a specialist would appear to invariably succeed in achieving earlier admission to hospital. The practice is so universal that I would not like my patients to suffer as a result of a lack of co-operation from local consultants through a lone crusade on my part… I should be glad to give evidence at any subsequent inquiry.
There has been much publicity of a similar kind. There was a letter a week or two ago, which was signed and gave the address of the sender, among the readers' letters in the Sunday Express. The writer told the story of a friend expecting her second baby who was told by the doctor that there was no chance of her obtaining a National Health Service bed at the local maternity hospital through the normal channels. There was, however, one way round the difficulty. The hospital's senior gynaecologist agreed to accept her as a private patient and assured her that he would have no difficulty in obtaining a bed for her under the National Health Service.
Only yesterday in Manchester, in the presence of two doctors and a leading citizen of the city, I was told by a lady that last week her husband was admitted to a bed in a north Manchester hospital the morning after paying six guineas for a private consultation. He was a sick

man, he certainly needed hospitalisation, but his condition, I am advised, was one which, perhaps, would not have succeeded through the normal channels in getting him into a bed as quickly as happened on this occasion. The lady said that her husband had used similar channels to go into hospital on an earlier occasion for a hernia operation, for which there were long waiting lists at most hospitals, but he paid a private fee and was admitted to hospital. She said, quite simply and straightforwardly, "I thought everybody did it."
I come now to the other matter concerning the difficulty that many people experience in seeing a consultant at the out-patient department, which to many of us seems to be a considerable difficulty and widespread. I do not need letters or stories from other people, because I have a personal experience. Some years ago, I injured my thumb and I went, as many other hon. Members no doubt have done, to the Westminster Hospital. I was X-rayed. I returned and was told by a young houseman that he was happy to tell me that in his opinion there was no fracture, but he thought there was an old arthritic condition around the joint. I am a layman, but I thought it highly improbable that such a condition was present and I said that I would like to see the consultant.
The young man knew that I was a Member of the House. He said to me, " Possibly, you can see him, but you will have to wait a very long time, and you might not see him. But, if you like, I can arrange for you to see him privately." I was astonished, but I said "Can you really?" He said, "Yes." I replied, " All right. Then let us do so." There and then, from the hospital, he telephoned the private consulting rooms in Harley Street and made the appointment and said that he would send the plates along. He did. So the whole resources of the National Health Service in the public sector were placed behind a purely private transaction. The only means of obtaining that private transaction were through the hospital, where that consultant held a highly-paid appointment. That was a personal experience.
People in Manchester may say, as I am sure they have done, "It is true?" Let me refer to one or two letters which


have come to me, so that hon. Members may judge whether it be true. Here is a letter from a lady in Manchester, who was referred to a consultant in May, 1958. She names the consultant and the hospital and she states:
At his clinic, I saw a doctor and two months later was admitted (a varicose condition).
She certainly did not have long to wait. She continues:
Not until after the operation did I discover, as a result of ward gossip, that the doctor whom I had seen at the clinic and once in the ward was not Mr. … but his registrar. Incidentally, I never saw Mr. … at all. Doubtless I could have found that out by asking questions at the beginning, but having seen twice at Manchester Royal Infirmary the consultant to whom I had been referred, it never struck me that the same would not obtain at other Manchester hospitals. At two post-operative clinics I saw the same registrar and (again from clinic gossip) heard that Mr. … never attended his own clinic.
Speaking of the last occasion, the lady states:
Furthermore, as to times of attendance, the registrar never appeared before 3 p.m., clinic appointments starting at 2 p.m., very much to the annoyance of the outpatients, many of whom, like myself, had urgent domestic ties. After waiting for 1¾ hours, I left without seeing Dr. … (I was due for final discharge anyway) and later wrote complaining of the arrangements to the hospital secretary, from whom I had an apologetic but unhelpful reply.
Another letter from Blackley, Manchester, says:
It has been my experience four times over the last few years to be referred to various registrars, although my doctor has given me notes to see consultants under the Health Service. Over the years I have not had the slightest difficulty in seeing consultants provided I paid a private fee.
Another letter is from a gentleman in Levenshulme, Manchester, and states:
Between 1950 and 1957 I paid three visits to Manchester Royal Infirmary, and then I saw D. A. privately at his rooms. He had been suggested to me by my doctor in an effort to explain certain symptoms. He promptly diagnosed a form of sclerosis and obviously since then I have paid many visits to the Infirmary. I have yet to be seen by Dr. A at the Infirmary clinic, though I have seen him on three occasions privately at his rooms almost 'by return of post.'".
Another man writes from Cheshire:
About two or three years ago my wife was seriously ill, and our own doctor was away but he had a locum working for him. This locum sent my wife to a consultant at Manchester Royal Infirmary, who, I believe,

although I would not be certain, was a Professor X. My wife kept the appointment and said she had to go for another visit in one month's time. The second appointment was kept and, of course, I was anxious to know the findings, but all I could find out was that my wife had to go for a third appointment in another month's time.
The letter says that he discovered that she was seeing a young man, who may have been highly qualified and was charming, but who certainly was not the consultant to whom his wife had been sent. He took his wife away and they have not been back since.
All these people speak highly of the kindness and good treatment they have had from people at the hospital. There are very many other instances I could give, but there is not sufficient time. I have a feeling, in any case, that we shall be coming back to this subject in the weeks ahead.
What is the trouble? Have we too few consultants, or do those that we have give preference to private fee-payers in the out-patient departments? I have been told that those selected to be seen by the consultants are often people who have seen the consultants in their rooms, or people to whom they have paid domiciliary visits as a result of recommendations from certain general practitioners. Or is it just that they do not turn up on time at the clinics, as one lady says? Is that the answer? Or is this inherent, as I suspect, in the part-time system? It is really impossible to try to run the economics of private enterprise hand in hand with a public, full-time service.
At the clinics, the patients should at the very least be told who is seeing them and looking at their bodies. Why not have an occasional spot check on selected wards to verify how the people in its beds on that day were admitted? Another suggestion is for a check on simple surgical cases, such as hernia or varicose veins, admitted last year to one single hospital, and to compare the waiting time of those admitted after private consultation with the time that people who went through the normal channels of the out-patient department had to wait.
I leave the matter there. In closing, I would just say once again that in the weeks ahead we shall be returning to this National Health Service question,


certainly as it affects the Manchester region, because there are many other matters which cause great concern and which we think should be brought to the attention of the Minister.

10.40 p.m.

Dr. Edith Summerskill: I wish to say only a very few words in support of what my hon. Friend the Member for Manchester, Exchange (Mr. W. Griffiths) has said. I am quite sure that the House is grateful to him for raising this matter. We are all jealous of the reputation of the National Health Service, and only in this way can we ventilate these problems.
I want to raise two points. Rumblings of discontent from registrars have reached me because so many of them feel frustrated because they have not reached consultant status. Indeed, it has been impossible to promote them to that status because there are not sufficient vacancies. They feel that they are called upon too often to deputise for the consultants.
Furthermore, there have been complaints that young men and women who are doing pre-registration jobs in the hospitals have also been asked to do too much of the work which should fall to the registrars. The difficulty is to know how these grievances can be remedied. It seems that these complaints can only come to our ears either through the patients themselves, as my hon. Friend said, or through individuals who are themselves in medical circles.
I should like the Parliamentary Secretary to tell me through what channel these complaints, which are real, can reach the ears of authority.

10.43 p.m.

The Parliamentary Secretary to the Ministry of Health (Miss Edith Pitt): The hon. Member for Manchester, Exchange (Mr. W. Griffiths) has raised in this debate tonight several matters which I think are of wider interest than the heading which he gave to his Adjournment debate, which was "Manchester Hospitals." I think that they will be of interest to the country as a whole as well as to the citizens of Manchester, and I am glad to have the opportunity of replying to some of the points which have arisen tonight and in earlier Parliamentary Questions.
I will do my best to reply, though I think that the hon. Gentleman will be the first to appreciate that I cannot comment on the individual letters which he has read out since I had no prior knowledge of them.
First, may I say a brief word about Manchester in particular and Manchester's needs? As a centre for medical and dental teaching, as the focus for clinical advice and hospital administration in a region which extends from Windermere in the north to Crewe in the south, and as the centre of a conurbation with a population of over 2 million, Manchester deserves to have the attention to its hospital services which has been given by one of its Members this evening and which, I assure the hon. Gentleman, will continue to be given by the hospital boards, by my right hon. and learned Friend and myself.
The development of the services in Manchester has, of course, to be considered in relation to the needs of other parts of the country and to the amount of money that can be made available for this part of the sector of public investment. My right hon. and learned Friend is therefore anxious to see that the services as they exist are as efficient as possible and that patients referred to Manchester hospitals are given the best possible service. Here I would agree with the right hon. Lady the Member for Warrington (Dr. Summerskill) that we are jealous of the National Health Service in this country. We would wish it to maintain the good name which, in general, I think, it enjoys.
One very important consideration is, of course, the waiting time to which the hon. Gentleman referred, that is, the time that patients have to wait before being admitted to a hospital bed. In Manchester, as in other parts of the country, waiting lists—and waiting time—are often much longer than we would wish. Neither my right hon. and learned Friend nor the hospital boards view this with complacency. Since 1951 the total number of staffed beds in hospitals in Manchester has increased from 5,638 to 5,965, and schemes at present under consideration will add a further 300 or more.
Much of the capital work being done is in the nature of improvement or replacement of existing facilities and there is a matter of quality as well as of


quantity. I think that the hon. Member will be interested to know that since the introduction of the National Health Service the total expenditure in Manchester on ordinary capital allocation, that is for the three hospital management committees and the teaching group, is about £2½ million. In addition, with the centrally financed programme in the reinstatement of the ward blocks of the Royal Infirmary and the large number of schemes which my right hon. and learned Friend has authorised centrally, some not yet started, the figure will be over £5 million.
I now turn to some of the criticisms concerning the running of the hospitals in Manchester made by the hon. Member. I ought to qualify the word "made" by saying that he voices the criticisms, because they have already been made in Manchester. They concern among other things the services of part-time consultants. It is, of course, well known that the National Health Service employs, and always has employed, both full-time and part-time consultants. It would be impossible to dispense with the services of part-time consultants or to require all those consultants to become full-time.
Many part-time hospital consultants work in other parts of the Health Service and others have appointments in universities or other public services. These part-time consultants make a most valuable contribution to the Health Service. They have, of course, the right under part-time contracts to take private patients and it is in connection with those patients that an abuse of the hospital administration has been alleged to exist.
It is alleged that these patients gain earlier admission to hospital than the patients who are seen by consultants under the ordinary National Health Service arrangements. This allegation has been made concerning a hospital controlled by the Board of Governors of the United Manchester Hospitals and I have asked the Board for its comments on it. The Board has assured me that patients recommended for admission to hospital after a private consultation who do not wish to go into a pay-bed are put on the ordinary waiting list and their cases are subject to the same considerations regarding urgency as those of other patients. Cases of real urgency are admitted immediately and other cases

dealt with according to the medical needs of the patients.
This is not an argument which is susceptible of statistical assessment or proof. Perhaps the best proof is that the papers of patients who have been seen privately are not readily distinguishable from those of others. As I explained to the hon. Member on 9th May, any detailed information regarding comparative periods of waiting would involve the examination of thousands of individual case records. We would have to ask hospitals to put several staff on for several days to go through the admission tickets of all the patients, because they are not distinguished in any way. I have taken note of the hon. Member's suggestion that we might consider a spot check, and that I will certainly pursue for him.
When the hon. Member asks whether there is something to conceal I assure him that there is not. My right hon. and learned Friend does not think that he would be justified in asking the Board to undertake a complete examination over the year of all admission tickets, but if the hon. Member is prepared to give details of particular cases where he thinks preference has been given to a patient who has had a private consultation I shall be glad to have inquiries made.
I appreciate the hon. Gentleman's statement that he makes no wholesale attack on consultants, and I am anxious that any complaint against the National Health Service and those working in it should be cleared satisfactorily. I am sure that the hon. Gentleman will agree that allegations which are not supported by detailed evidence can be damaging to the service and disturbing for patients whose confidence in the service and in its medical staff it is so important to maintain.
The hon. Gentleman also complained about out-patient clinics and said that National Health Service patients of some general practitioners in Manchester were not seen by the consultants to whom they are referred but by a registrar or other deputy. There is nothing essentially wrong in this system of clinical organisation which, incidentally, provides the means by which registrars gain practical experience in the specialty of their choice which is necessary before they in turn can


receive appointments as consultants. It is an accepted part of hospital staffing arrangements, but the delegation is done expressly by the consultant who retains his ultimate responsibility for the patient.
The hon. Gentleman referred to the fact that an inquiry is proceeding in the case of a Shrewsbury hospital under the Birmingham Hospital Board, but in that case we have been given information on which we can hold an inquiry, and if the hon. Gentleman is prepared to let me have those letters from which he quoted that would be helpful and would enable me to make further inquiries. I will certainly give the undertaking to treat them all in confidence if the hon. Gentleman is concerned about protecting the interests of those people who have written to him.

Mr. W. Griffiths: I am obliged to the hon. Lady. I will seek the permission of the writers.

Miss Pitt: I referred earlier to the need for patients to have confidence in the hospital staff, and it is on that note that I close. I am as anxious as the hon. Gentleman is to dismiss these sweeping allegations which have appeared in Manchester newspapers and I appreciate the restraint with which he has put his case.

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at eight minutes to Eleven o'clock.